Bank exams reward accuracy under time pressure more than depth, and prelims is often decided by a few marks in a twenty minute section. Questions here follow the IBPS PO, IBPS Clerk, SBI PO, SBI Clerk and RBI Grade B pattern across quantitative aptitude, reasoning ability, English language, general and banking awareness, and computer aptitude. Data interpretation sets are included in full rather than as single questions, since that is how they appear in the paper.
Which of the following IS a characteristic of a Scheduled Bank as per RBI definitions?
Answer: B
A Scheduled Bank must have minimum paid-up capital and reserves of Rs. 5 lakh as per RBI definitions.
Q.82Hard
According to Basel III framework implemented in India, what is the minimum Common Equity Tier 1 (CET1) ratio for banks?
Answer: A
Basel III mandates minimum CET1 ratio of 5.5% for banks, with additional buffers bringing total capital requirements higher.
Q.83Hard
A bank's Net Interest Margin (NIM) decreased from 3.2% to 2.8% YoY. If gross advances are ₹400,000 crore, what is the approximate impact on net interest income?
Answer: B
NIM decrease = 3.2% - 2.8% = 0.4%. Impact = 400,000 × 0.4% = ₹1,600 crore approximate decrease in NII.
Q.84Hard
A bank's Interest Coverage Ratio (ICR) is 3.5x. If interest expenses are ₹2,800 crore, what is the approximate profit before interest and taxes (EBIT)?
Analyze the stress test data: Under the baseline scenario, a bank's CRAR is 12.5%. Under the adverse scenario (with 200 bps slippage in NPA), the CRAR drops to 10.8%. What is the impact on capital adequacy?
Answer: A
Decline = 12.5% - 10.8% = 1.7% = 170 bps. 10.8% is still above Basel III minimum CRAR of 10.5%
Q.86Hard
A bank's Effective Interest Rate (EIR) on advances is 9.2% and on deposits is 4.1%. If advances constitute 65% of total earning assets and deposits form 75% of total liabilities, calculate the approximate Net Interest Spread (NIS).
Answer: C
NIS = (Yield on Advances × Advances % / Total Assets) - (Cost of Deposits × Deposits % / Total Liabilities). Simplified: 9.2% - 4.1% = 5.1% as basic spread
Q.87Hard
Study the multi-year data: CAR in FY2022: 13.2%, FY2023: 13.8%, FY2024: 14.5%. If RWA increased by 18% from FY2023 to FY2024, what is the percentage change in capital?
Answer: C
CAR = Capital/RWA. 14.5% = Capital / (RWA×1.18). If FY2023 CAR was 13.8%, capital must have grown at: 14.135.8 × 1.18 = 1.248 = 24.8% growth
Q.88Hard
A bank's treasury portfolio shows: Government Securities ₹1,50,000 crore (YTM: 6.8%), Corporate Bonds ₹75,000 crore (YTM: 7.8%), Money Market Instruments ₹25,000 crore (YTM: 6.2%). Calculate the portfolio's weighted average yield.
Examine the comparative data: Bank A has NPA ratio of 1.8% with provision coverage of 72%, Bank B has NPA ratio of 2.2% with provision coverage of 68%. Which bank has better asset quality indicators in terms of net NPA?
Answer: B
Net NPA = GNPA × (1 - Provision Coverage). Bank A: 1.8% × (1 - 0.72) = 1.8% × 0.28 = 0.504% ≈ 0.50%. Bank B: 2.2% × 0.32 = 0.704% ≈ 0.70%. Bank A is better
Q.90Hard
A bank's Return on Assets (ROA) is 1.2% with a Net Profit Margin of 24%. What is the implied Asset Turnover Ratio?
Answer: A
ROA = Net Profit / Total Assets. Net Profit Margin = Net Profit / Revenue. Asset Turnover = Revenue / Assets. ROA = NPM × Asset Turnover. 1.2% = 24% × Asset Turnover. Asset Turnover = 0.05 times.
Q.91Hard
A bank reports Floating Rate Advances of ₹1,50,000 crore and Fixed Rate Advances of ₹90,000 crore. If rates rise by 200 bps, what is the repricing benefit compared to a bank with 60% floating rate portfolio?
Answer: A
First bank has 62.5% floating rate (150,240000,000), second bank has 60%. First bank will capture more repricing benefit when rates rise as more of its portfolio reprices upward, enhancing net interest income.
Q.92Hard
Analyze the quarterly data: A bank's Advances grew 14% QoQ while Deposits grew 8% QoQ. If this trend continues, which regulatory metric is most at risk?
Answer: B
Advances growing faster (14%) than deposits (8%) will increase LTD ratio unsustainably and strain liquidity metrics. If continued, it could breach LCR and NSFR requirements, risking regulatory non-compliance.
Q.93Hard
Under RBI's resolution framework for financial stress, what is the key trigger for invoking prompt corrective action (PCA) for a bank?
Answer: B
RBI's PCA framework is triggered when a bank's capital ratio, asset quality (Net NPA > 6%), or profitability metrics breach specified thresholds. This is designed to protect financial stability.
Q.94Hard
Examine the data: Bank X's Current Ratio (liquid assets to demand deposits) is 45%, while regulatory requirement is 80%. This indicates:
Answer: B
45% Current Ratio against 80% requirement indicates the bank is deficient in liquid assets relative to demand deposits, posing liquidity risk
Q.95Hard
A bank's Commercial Advances showed CAR of 18.5%, Agricultural Advances CAR of 15.2%, and Consumer Advances CAR of 11.8%. Which segment carries the highest credit risk as per risk weighting?
Answer: A
Higher CAR for a segment indicates higher risk weights assigned. Commercial Advances at 18.5% CAR carries highest risk weighting under Basel III norms
Q.96Hard
Analyze quarterly trends: Bank Y's Net Interest Income grew 8% while Total Assets grew 12% QoQ. This implies:
Answer: B
When assets grow faster (12%) than NII (8%), it indicates NIM is compressing as the bank is earning lower interest on incremental assets
Q.97Hard
Under RBI's Prompt Corrective Action (PCA) framework 2024, at what Capital Adequacy Ratio threshold does a bank enter PCA supervision?
Answer: B
Under RBI's PCA framework, SCBs with CAR below 8.5% (along with other indicators) trigger supervisory action and corrective measures
Q.98Hard
A bank's Statutory Liquidity Ratio (SLR) requirement is 18%. If deposits are ₹10,00,000 crore and current SLR maintenance is ₹1,95,000 crore, calculate the deficit/surplus:
Analyze the complex scenario: Bank Z has CAR of 16%, NPA ratio of 6.5%, and ROA of 0.8%. It wants to increase lending by ₹50,000 crore. What is the primary constraint?
Answer: B
With 16% CAR (closer to Basel III minimum), and planned lending increase, the bank's capital adequacy becomes the binding constraint for expansion
Q.100Hard
Bank E's Return on Equity (ROE) decreased from 16.2% to 14.8% in Q3 2024 despite profit increase. What is the most likely reason?
Answer: B
ROE = Net Profit / Shareholders' Equity. A decrease in ROE despite profit increase suggests equity capital increased (through capital infusion or retained earnings), diluting the ROE metric.
