A bank maintains a Cash Reserve Ratio (CRR) of 4.5% as per RBI mandate. If its total liabilities are ₹10,00,000 crore, calculate the minimum cash reserve required.
Analyze the quarterly data: A bank's Net Interest Income (NII) was ₹12,000 crore (Q1), ₹13,200 crore (Q2), ₹14,520 crore (Q3), and ₹15,972 crore (Q4). What is the growth pattern?
A bank's Asset Quality Ratio improved from 94.2% in FY2023 to 96.8% in FY2024. If FY2023 advances were ₹4,50,000 crore, what was the approximate amount of standard assets?
Answer: A
Standard assets = Asset Quality Ratio × Total Advances = 94.2% × ₹4,50,000 crore = ₹4,23,900 crore
Q.24Medium
Examine the data: Bank X's Cost-to-Income Ratio decreased from 48% (FY2023) to 44% (FY2024). If operating expenses in FY2024 are ₹8,800 crore, what is the estimated operating income?
Answer: B
Cost-to-Income Ratio = Operating Expenses / Operating Income; 44% = 8,800 / OI; OI = 8,0800.44 = ₹20,000 crore
Q.25Medium
A bank's advances grew by 15% year-on-year while deposits grew by 12% in FY2024. If the Loan-to-Deposit (LTD) ratio was 78% in FY2023, what is the approximate LTD ratio in FY2024?
Study the quarterly performance: Q1 profit: ₹5,600 crore, Q2 profit: ₹6,160 crore, Q3 profit: ₹6,776 crore, Q4 profit: ₹7,454 crore. What is the total annual profit and approximate quarterly growth rate?
If the RBI reduces the Repo Rate by 50 basis points, what is the likely impact on a bank's Net Interest Margin (NIM) in the short term?
Answer: B
When repo rate decreases, banks cut lending rates faster than deposit rates, compressing NIM (interest spread)
Q.28Hard
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.29Hard
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.30Hard
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.31Medium
A scheduled commercial bank reports: Tier-1 Capital: ₹50,000 crore, Tier-2 Capital: ₹20,000 crore, RWA: ₹500,000 crore. Calculate the Total Capital Ratio and determine compliance status.
Answer: B
Total Capital = ₹50,000 + ₹20,000 = ₹70,000 crore. CRAR = 70,500000,000 = 14%. Basel III minimum is 10.5%, so 14% is compliant
Q.32Hard
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.34Easy
A bank's Loan-to-Deposit (LTD) ratio increased from 78% in FY2023 to 82% in FY2024. What does this indicate?
Answer: A
LTD ratio measures advances as a percentage of deposits. An increase from 78% to 82% means the bank is lending more aggressively relative to deposits, which could indicate higher credit expansion or lower deposit growth.
Q.35Medium
If a bank's Cost of Funds increased by 75 basis points while the Yield on Assets increased by 50 basis points, what is the likely impact on Net Interest Margin (NIM)?
Answer: B
NIM = Yield on Assets - Cost of Funds. If Cost of Funds increases by 75 bps and Yield increases by only 50 bps, NIM decreases by 25 bps (50 - 75 = -25).
Q.36Medium
A scheduled commercial bank's Priority Sector Lending (PSL) target for FY2024-25 is 40% of adjusted net bank credit. The bank achieved 38% in Q3. What is the regulatory implication?
Answer: C
PSL compliance is measured at the end of the financial year. Banks must maintain 40% PSL by March 31. Non-compliance attracts penalties equal to shortfall amount at repo rate + 50 bps.
Q.37Easy
A bank reports Operating Profit of ₹8,500 crore and Provisions & Contingencies of ₹2,100 crore. Calculate the Pre-tax Profit.
Answer: A
Pre-tax Profit = Operating Profit - Provisions & Contingencies = 8,500 - 2,100 = ₹6,400 crore. Provisions are deducted before arriving at pre-tax profit.
Q.38Medium
Analyze the data: A bank's CASA ratio decreased from 42% in Q2 to 39% in Q3. What regulatory and operational concern does this raise?
Answer: B
CASA (Current Account & Saving Account) ratio declining means lower proportion of low-cost deposits. The bank must fund advances with more expensive term deposits, which increases Cost of Funds and compresses NIM.
Q.39Medium
A bank's Gross NPA increased from ₹18,500 crore in FY2023 to ₹22,300 crore in FY2024, while total advances grew from ₹2,10,000 crore to ₹2,35,000 crore. What is the change in Gross NPA ratio?
Answer: A
Gross NPA Ratio FY2023 = (18,2500,10,000) × 100 = 8.81%. FY2024 = (22,2300,35,000) × 100 = 9.49%. The ratio increased despite advances growth, indicating asset quality deterioration.
Q.40Medium
Under Basel III norms (as amended by RBI in 2024), what is the minimum Common Equity Tier-1 (CET1) capital requirement for Systemically Important Banks (SIBs)?
Answer: C
Basel III requires CET1 minimum of 4.5% plus Capital Conservation Buffer of 2.5%. For SIBs, an additional 0.5% surcharge applies, totaling 6.50% minimum CET1 requirement.
