Govt. Exams
Entrance Exams
ICICI Bank, HDFC Bank, Axis Bank, and State Bank of India are classified as D-SIBs and required to maintain higher capital buffers due to systemic importance.
RBI mandates that banks conduct comprehensive security audits at least annually, with more frequent assessments for critical systems.
Masala Bonds are rupee-denominated bonds issued overseas with no fixed maximum tenure restriction, governed by FEMA guidelines.
NIM is calculated as (Interest Income - Interest Expenses) / Average Earning Assets. It measures the bank's core profitability from lending and borrowing operations, crucial for assessing operational efficiency.
As per Basel III, the LCR requirement mandates that banks maintain high-quality liquid assets at least equal to 100% of their net cash outflows over 30 days under stress scenarios.
Pillar 2 of Basel III involves supervisory review, where regulators assess banks' internal capital adequacy processes, stress testing mechanisms, and risk management frameworks.
MSF is an overnight borrowing facility for banks available at a penal rate (typically 100-200 bps above the repo rate) to manage temporary liquidity mismatches. It forms the upper end of the RBI's interest rate corridor.
ROA (Return on Assets) measures net income as a percentage of total assets, indicating how efficiently a bank uses its assets to generate profits. Higher ROA indicates better profitability.
A haircut is a percentage discount applied to the market value of collateral to account for potential market volatility and protect the lender. For example, if a security worth Rs. 100 has a 10% haircut, it's valued at Rs. 90.
The reverse repo rate is the interest rate at which RBI borrows from banks to absorb excess liquidity from the financial system.
