Which regulatory body is responsible for regulating Cooperative Banks in India?
Answer: B
Cooperative Banks are regulated jointly by RBI (for scheduled cooperative banks) and respective State Governments under dual regulatory framework in India.
Q.82Medium
Bank D's Earning Per Share (EPS) grew from ₹45 to ₹54 between FY2023 and FY2024. The stock price remained at ₹1,080. What is the Price-to-Earnings (P/E) ratio for FY2024?
Answer: B
P/E Ratio = Stock Price / EPS = ₹1,080 / ₹54 = 20x. This indicates the market values the bank at 20 times its annual earnings.
Q.83Hard
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.
Q.84Medium
According to RBI's latest circular on Liquidity Coverage Ratio (LCR) for 2024, what is the minimum percentage?
Answer: C
RBI mandates a minimum LCR of 100% for all banks, meaning banks must maintain high-quality liquid assets to cover net cash outflows over 30 days under stress scenarios.
Q.85Medium
Bank F's Advances increased by ₹8,500 crores while Deposits increased by ₹6,200 crores in FY2024. What does this indicate about the bank's funding strategy?
Answer: A
When advances grow faster than deposits, it indicates the bank is funding loan growth through borrowing from money markets, inter-bank lending, or external sources rather than relying on deposits.
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Q.86Easy
What is the primary objective of Basel III framework implementation in Indian banking?
Answer: B
Basel III aims to strengthen bank resilience to financial stress through enhanced capital requirements, improved risk management, and better liquidity standards, thereby enhancing overall financial stability.
Q.87Medium
Bank G's Interest Coverage Ratio dropped from 8.5x to 6.2x year-on-year. What does this suggest?
Answer: A
Interest Coverage Ratio = EBIT / Interest Expense. A decline from 8.5x to 6.2x indicates the bank generates less EBIT relative to interest expenses, reducing its capacity to comfortably service debt.
Q.88Medium
Under RBI's Know Your Customer (KYC) norms 2024, what is the maximum cash deposit limit for new accounts without enhanced documentation?
Answer: A
RBI's KYC guidelines restrict cash deposits to ₹1 lakh per month for new accounts in the first 6 months without enhanced documentation, to curb money laundering and terror financing.
Q.89Hard
Bank H's Net Interest Spread (NIS) narrowed from 2.4% to 2.1% in Q3 2024. What market condition likely caused this?
Answer: B
NIS = Rate earned on assets - Rate paid on deposits. Narrowing suggests the yield curve compressed, reducing the difference between lending and deposit rates, a typical scenario in monetary tightening.
Q.90Medium
Analyze the scenario: Bank I has ₹50,000 crores in total advances with sector-wise distribution - Agriculture 12%, MSME 18%, Services 35%, Manufacturing 25%, Others 10%. If the bank needs to increase agriculture lending by 5% of total advances, what is the required additional disbursement?
Answer: A
Current agriculture advances = 12% of ₹50,000 = ₹6,000 cr. Required increase of 5% of total = 5% of ₹50,000 = ₹2,500 crores additional disbursement needed.
Q.91Hard
Which of the following is the correct sequence of RBI's regulatory hierarchy for bank compliance?
Answer: C
RBI's regulatory instruments in descending order of mandate: Directions (mandatory), Notifications (legal), Circulars (operational guidance), Guidelines (advisory). Directions are most binding.
Q.92Hard
Bank J reported Capital Adequacy Ratio (CAR) of 15.2% with CET1 of 9.5%, Tier 1 of 11.8%, and Tier 2 of 3.4%. Is the bank compliant with Basel III norms?
Answer: B
Basel III minimums: CET1 6.5%, Tier 1 8.5%, Overall CAR 10.5%. Bank J has CET1 9.5%, Tier 1 11.8%, CAR 15.2% - exceeding all minimums and compliant with conservation buffers.
Q.93Medium
Bank K's Consumer Advances grew from ₹12,000 crores to ₹14,800 crores while maintaining the same default rate of 1.2%. What was the increase in absolute NPA amount?
Answer: A
Original NPA = 1.2% of ₹12,000 = ₹144 cr. New NPA = 1.2% of ₹14,800 = ₹177.6 cr. Increase in NPA = ₹177.6 - ₹144 = ₹33.6 crores.
Q.94Medium
Bank X's Loan-to-Deposit (LTD) ratio stood at 78% as of March 2024. If the bank's total deposits increased by ₹5,000 crores in Q1 FY2025 while maintaining the same LTD ratio, by how much would the advances increase?
Answer: A
With LTD ratio of 78%, advances are 78% of deposits. If deposits increase by ₹5,000 crores, advances increase by 78% of ₹5,000 = ₹3,900 crores. This tests understanding of key banking ratios and their application in data interpretation.
Q.95Hard
According to RBI's Monetary Policy 2024-25, the Statutory Liquidity Ratio (SLR) for Scheduled Commercial Banks was set at 18%. Bank Y maintains SLR compliance through Government securities worth ₹45,000 crores. What is Bank Y's approximate total liabilities?
Answer: A
SLR = 18% of total liabilities. If Government securities (SLR compliance) = ₹45,000 crores, then Total Liabilities = ₹45,0000.18 = ₹2,50,000 crores. Tests understanding of RBI regulations and ratio calculations relevant to banking exams.
