Risk Management

Question Bank : Risk Management
1. Banks Capital is expressed in terms of _________________

a. Capital
b. CAR
c. CRAR
d. Equity
____________________________________________________________________________________________
2. Near Miss Events is related to the following

a. Liquidity Risk
b. Credit Risk
c. Operational Risk
d. Market Risk
____________________________________________________________________________________________
3. In a bank’s portfolio, losses stem from outright default due to inability or unwillingness of a customer or
counterparty to meet commitments in relation to lending, trading, settlement and other financial transactions. This
statement relates to
a. Operational Risk
b. Market Risk
c. Credit Risk
d. Liquidity Risk
____________________________________________________________________________________________
4. The risk that the value of on or off balance sheet positions will be adversely affected by movements in equity and
interest rate markets, currency exchange rates and commodity prices. This relates to
a. Operational Risk
b. Market Risk
c. Credit Risk
d. Liquidity Risk
____________________________________________________________________________________________
5. Risk arises when the banks are unable to generate cash to cope with a decline in deposits or increase assets
a. Operational Risk
b. Market Risk
c. Credit Risk
d. Liquidity Risk
____________________________________________________________________________________________
6. Inability to meet the liabilities as they become due is

a. Operational Risk
b. Market Risk
c. Credit Risk
d. Liquidity Risk
____________________________________________________________________________________________
1. C 2. C 3. C
4. B 5. D 6. D
7. Risk Management is identification, measurement, risk control and risk mitigation.

a. TRUE
b. FALSE
c. Can't say
d. None of the above.
____________________________________________________________________________________________
8. Which of the following is not new innovation of Basel – 3?

a. Liquidity ratios
b. Leverage ratios
c. Bifurcation of Tier – 1 capital into two
d. Capital adequacy ratio
____________________________________________________________________________________________
9. One of the following does not come under Tier 1 capital as per Basel 2 guidelines.
a. Paid up equity capital.
b. Statutory reserves and other disclosed free reserves.
c. Capital reserves representing surplus arising out of sale proceeds of assets.
d. Revaluation Reserve
____________________________________________________________________________________________
10. In Credit risk management, one of the following forms may not result in Credit risk:
a. in the case of direct lending: principal/and or interest amount may not be repaid;
b. in the case of guarantees or letters of credit: funds may not be forthcoming from the constituents upon
crystallization of the liability;
c. in the case of securities trading businesses: funds/ securities settlement may not be effected;
d. in the case of direct investments in the secondary market, the market price may fluctuate
____________________________________________________________________________________________
11. Basel is the name of _______________

a. Person
b. Committee
c. Place
d. Group of persons
____________________________________________________________________________________________
12. What do you mean by BIS?

a. Basel Inspection & Supervision
b. Banking Internal Supervision
c. Bank for International Settlement
d. Bank for Internal settlement
____________________________________________________________________________________________
7. A 8. D 9. C
10. D 11. C 12. C
13. What do you mean by CAR?

a. Capital Adequacy Ratio
b. Current Assets Ration
c. Currency Acceptance Ratio
d. Convertible Account Ratio
____________________________________________________________________________________________
14. What do you mean by CRAR?

a. Current Risk Asset Ratio
b. Capital to Risk Weight Assets Ratio
c. Capital to Risk Awareness Ratio
d. Capital to Realizable Assets Ratio
____________________________________________________________________________________________
15. What is the CAR as per Basel – 1 recommendations?

a. 6
b. 7
c. 8
d. 9
____________________________________________________________________________________________
16. What is RWA?

a. Risk Weighted Assets
b. Risk weighing Assets
c. Risk weightage Assets
d. Risk Weighted Advances
____________________________________________________________________________________________
17. Where does the secretariat of Basel Committee located?

a. New York
b. London
c. Paris
d. Basel
____________________________________________________________________________________________
18. What is the main objective of the Basel Committee?

a. To promote universal banking business in the world
b. To give licenses to baking in different countries
c. To promote safety and soundness of global financial system
d. To promote safety and soundness of banking business within the country
____________________________________________________________________________________________
13. A 14. B 15. C
16. A 17. D 18. D
19. Which country the city Basel is located?

a. Netherland
b. Iceland
c. Switzerland
d. Belgium
____________________________________________________________________________________________
20. What is first risk identified by the Basel committee – I?

a. Operational Risk
b. Reputational Risk
c. Credit Risk
d. Market Risk
____________________________________________________________________________________________
21. Which risk was introduced by the Basel committee by way of an amendment in the year 1995?
a. Residual Risk
b. System Risk
c. Market Risk
d. Operational Risk
____________________________________________________________________________________________
22. Which of the following risks was introduced by Basel – II committee?

a. Market Risk
b. Credit Risk
c. Operational Risk
d. Systemic Risk
____________________________________________________________________________________________
23. What is the name of the Basel - II structure?

a. Three Pillar approach
b. Risk Weighted Assets Approach
c. Capital adequacy approach
d. No proper structure, it is only recommendation of Capital Adequacy Ratios
____________________________________________________________________________________________
24. What stands for Pillar -1 of Basel – 2?

a. Minimum Capital Adequacy
b. Risk Weighted Assets
c. Supervisory Review
d. Market discipline
____________________________________________________________________________________________
19. C 20. C 21. C
22. C 23. A 24. B
25. Pillar-I capital of Basel - 2 is otherwise called as?

a. Minimum Capital
b. Regulatory Capital
c. Economic Capital
d. Liquid Capital
____________________________________________________________________________________________
26. What is Pillar – 2 of Basel-2 structure?

a. Capital adequacy
b. Supervisory Review Process
c. Market Discipline
d. Income Recognition and Asset Classification
____________________________________________________________________________________________
27. As per Basel accords Pillar-2 Capital is also called as?

a. Regulatory Capital
b. Economic Capital
c. Residual Capital
d. Minimum Capital
____________________________________________________________________________________________
28. What do you mean by IRB?

a. Internal Revenue Board
b. Internal Rating Based
c. Internal Revenue Based
d. Internal Risk Based
____________________________________________________________________________________________
29. What do mean by AIRB?

a. Advanced Internal Rating Based
b. Asset Internal Rating Based
c. Advanced Internal Risk Based
d. Advances Internal Revenue Based
____________________________________________________________________________________________
30. What is the first method of calculation of Credit Risk?

a. FIRB
b. AIRB
c. Standardized measurement approach
d. Risk Weighted Assets method
____________________________________________________________________________________________
25. B 26. B 27. B
28. B 29. A 30. A
31. What is the first methodology used to measure Operational Risk?

a. Standardized Approach
b. Basic Indicator Approach
c. Advanced Measurement Approach
d. Loss events mapping method
____________________________________________________________________________________________
32. What are the two types of Capital as per Basel – I?

a. Tier –I and Tier – II
b. Tier – I and Tier 1.5
c. Regulatory Capital and Economic Capital
d. Risk free capital and Risky capital
____________________________________________________________________________________________
33. What are the components of Total Risk Weighted Assets of a Bank?
a. Credit Risk
b. Market Risk
c. Operational Risk
d. All the above
____________________________________________________________________________________________
34. What are the components of Tier – I capital as per Basel – 3 Committee?
a. Common Equity
b. Common Equity (CET1) and Additional Tier – 1 Capital (AT1)
c. Additional Tier – 1 Capital
d. Paid up capital
____________________________________________________________________________________________
35. AMA under risk management concepts relates to ?

a. Credit Risk Measurement approach
b. Market Risk Measurement method
c. Operational Risk Measurement approach
d. Assets Measurement Approach
____________________________________________________________________________________________
36. Asset Liability Management involves bucketing of

a. Inflows and out flows
b. Only balance sheet and not off balance sheet items
c. Repayments and interest only
d. All of the above
____________________________________________________________________________________________
31. B 32. A 33. D
34. B 35. C 36. A
37. Which one of the following is not a liability ?

a. Deposits
b. Borrowings
c. Investments
d. Capital
____________________________________________________________________________________________
38. Risk stems from mismatch between Assets and Liabilities

a. TRUE
b. FALSE
c. Not possible
d. Can't say
____________________________________________________________________________________________
39. ALM helps in

a. Strategic balance sheet management
b. Calculating earnings at risk
c. Product pricing
d. All of the above
____________________________________________________________________________________________
40. Market risk is the risk arising out of change/movement in

a. Interest rate
b. Price of equity
c. Foreign currency
d. All of the above
____________________________________________________________________________________________
41. ALM organization structure has at its top

a. Board
b. CMD
c. Chief Risk Officer
d. ED
____________________________________________________________________________________________
42. Bucketing of ALM is based on

a. Residual maturity of A&L
b. Contractual maturity of A&L
c. Behavioural maturity of A&L
d. Both a & c
____________________________________________________________________________________________
37. C 38. A 39. D
40. D 41. A 42. D
43. One of the following is not a rate sensitive liability

a. Deposits
b. Borrowings
c. Refinances
d. Capital
____________________________________________________________________________________________
44. Identify the correct statement.

a. All Retail Deposits that are maturing next day are net outflows for assessing Liquidity
b. Retail deposits after netting the renewals are net outflows for assessing Liquidity
c. Retail deposits after netting renewals and preclosures are net outflows for assessing Liquidity.
d. Only interest on retail deposits are outflows
____________________________________________________________________________________________
45. An example of non maturing liability is......

a. Term Deposits.
b. Current Deposit
c. Borrowings
d. None of the above.
____________________________________________________________________________________________
46. Who is the custodian of Credit Risk Management Policy?

a. GM (RMD)
b. ED
c. MD & CEO
d. Board of the Ban
____________________________________________________________________________________________
47. Whether Credit Risk Management Policy covers the overseas branches ?
a. Yes applicable to all branches equally
b. Not applicable to branches
c. Applicable to all branches equally, but the extent of applicability / adoption depends upon its business profile
d. Applies for all banks in India
____________________________________________________________________________________________
48. Expand ALCO

a. Asset Liability Management Committee,
b. Accrued Liability Management & Loss
c. Assets and Liability Measurement Committee
d. Accrued Loss Measurement Committee
____________________________________________________________________________________________
43. D 44. C 45. B
46. A 47. C 48. A
49. Expand LRMC

a. Loan Review Mechanism
b. Loan Review Management Committee
c. Loss Review Management Committee
d. Loss Revenue Management Committee
____________________________________________________________________________________________
50. Who is the monitoring authority of SMA accounts of Rs.10.00 lakhs and above?
a. Branch Manager
b. Zonal Manager
c. General Manager
d. CO: Credit Monitoring Dept
____________________________________________________________________________________________
51. Who is the monitoring authority of Standard individual accounts of Rs.5.00 cores and above?
a. Credit Department
b. Zonal Manager
c. CO: Standard Assets Monitoring Committee
d. CO: Recovery Department
____________________________________________________________________________________________
52. What is the name the committee in our bank for routing the high value proposals (for proposals coming under
the powers of Head Office) for effective credit approval process ?
a. Credit Steering Committee
b. New Business Group
c. General Manager Corporate Credit
d. Executive Director
____________________________________________________________________________________________
53. In terms of RBI guidelines, bank should not open LCs and purchase / discount / negotiate bills bearing
the____________ clause.
a. “without recourse”
b. "With recourse"
c. No such stipulation
d. With high recourse
____________________________________________________________________________________________
54. Issue of Bank Guarantees in favour of Financial Institutions will be issued by

a. Corporate Office
b. Zonal Office
c. Branch
d. Bank can not issue such guarantees
____________________________________________________________________________________________
49. B 50. D 51. C
52. A 53. A 54. A
55. What measures bank has taken to mitigate the geographical concentration of credit portfolio?
a. No such limits
b. Bank decided not to give any loans in the areas where there is less than 100 branches
c. Fixed exposure ceiling on geographical areas classifying them North, South, East and West
d. Bank imposed restrictions on credit exposure in Metro and Urban centres
____________________________________________________________________________________________
56. What do you mean by IFRS?

a. Internal Financial Reporting System
b. International Financial Reporting Standards
c. International Financial Reporting Systems
d. Indian Financial Reporting Standards
____________________________________________________________________________________________
57. Which of the following is a liquidity ratio of Basel – 3?

a. Net Stable Funding Ratio
b. Capital Conservation Buffer
c. Counter Cyclical Capital Buffer
d. Capital Adequacy Ratio
____________________________________________________________________________________________
58. In which risk you can find basis risk?

a. Credit Risk
b. Market Risk
c. Operational Risk
d. Systemic Risk
____________________________________________________________________________________________
59. Which of the following Risk is common both in Basel 1 and Basel 2?
a. Credit Risk
b. Market Risk
c. Operational Risk
d. Risk management
____________________________________________________________________________________________
60. What is the minimum amount of CAR required under Basel – III ?
a. 8%
b. 9%
c. 11.50%
d. 14%
____________________________________________________________________________________________
55. C 56. B 57. A
58. B 59. A 60. B
61. Collapse of Lehman brothers led to formation of ___.

a. Basel – 1
b. Basel -2
c. Basel 1.5
d. Basel – 3
____________________________________________________________________________________________
62. In Basel -3 framework, the credit risk is measured and assessed in terms of
a. Sanctioned Limit
b. Outstanding Balance
c. Risk Weighted Assets
d. Recovery
____________________________________________________________________________________________
63. Under the Capital structure of Basel - 3, Where does the Revaluation reserve forms part of?
a. Tier – I capital
b. Tier – II Capital
c. It doesn’t form part of Capital
d. It is part of Equity Capital
____________________________________________________________________________________________
64. Which of the following is a leverage ratio introduced by Basel -3?

a. Liquidity Coverage Ratio
b. Net Stable Funding Ratio
c. Capital Conservation Buffer
d. Capital Adequacy Ratio
____________________________________________________________________________________________
65. Indicate the nature of risk that the bank encounters in Extending a packing credit loan to an exporter
a. Credit Risk
b. Market Risk
c. Operational Risk
d. Systemic Risk
____________________________________________________________________________________________
66. Indicate the nature of risks that the bank encounters in Purchasing an export bill to Greece for an exporter
a. Market Risk
b. Operational Risk
c. Credit risk and country risk
d. Systemic Risk
____________________________________________________________________________________________
61. D 62. C 63. B
64. C 65. A 66. C
67. Indicate the nature of risk that the bank encounters in sending a remittance instruction to a foreign bank
a. Credit Risk
b. Operational risk
c. Market Risk
d. Reputation Risk
____________________________________________________________________________________________
68. Prem Exports Pvt. Ltd is a major exporter client of the branch, having an export turnover of over USD 150 Mn.
The company is not of the practice of hedging its foreign currency exposures. What type of risk the company is
running which may impact on the ba
a. Exchange Risk
b. Hedging Risk
c. Option Risk
d. Systemic Risk
____________________________________________________________________________________________
69. Mr. Suresh, a non-resident holds several FCNR deposits totalling USD 1 Mn. Jointly with his wife, also a non-
resident. The deposit receipts were lodged in the safe custody of the branch. At a later date, the branch en cashed
deposits totalling USD 500000
a. Exchange Risk
b. Treasury Risk
c. Operational risk
d. Deposit Risk
____________________________________________________________________________________________
70. ANAD branch contacted its assigned AD branch and sought the exchange rate for the purchase of foreign
currency draft for USD 100000-. The AD branch obtained the rate from the dealing room, and reported the purchase
on the same day . However, no purchase t
a. Market risk and operational risk
b. Credit Risk
c. Systemic Risk
d. Liquidity Risk
____________________________________________________________________________________________
71. In another case, ANAD branch purchased a foreign currency cheque in the normal course, and sent the same to
the AD branch. When realization did not take place, it was discovered that the cheque was not dispatched by the AD
branch at all. What is the type
a. Credit Risk
b. Market Risk
c. Operational risk
d. Liquidity Risk
____________________________________________________________________________________________
72. When Basel III will be fully implemented in India?

a. 31.03.2019
b. 31.03.2018
c. 31.03.2016
d. 31.03.2017
____________________________________________________________________________________________
67. B 68. A 69. C
70. A 71. C 72. A

73. What is the minimum CET 1 to be maintained by Banks in India as on the day of full implementation of Basel III
in India?
a. 8%
b. 9%
c. 5.5%
d. 4.5%
____________________________________________________________________________________________
74. Where does the Perpetual non cumulative preference shares find place in the capital structure of Basel - 3?
a. AT 1
b. CET 1
c. T 2
d. Not Capital
____________________________________________________________________________________________
75. When from the Capital conservation buffer implemented in India?

a. 31.03.2015
b. 31.03.2016
c. 31.03.2018
d. 31.03.2019
____________________________________________________________________________________________
76. What is the Credit Conversion factor (CCF) for Financial guarantee?
a. 75%
b. 125%
c. 100%
d. 200%
____________________________________________________________________________________________
77. What are all the Characteristics of 'equity'?

a. It is irredeemable
b. It does not embody any obligation on the part of the issuer
c. It conveys a residual claim of the assets or income of the issuer
d. All the above
____________________________________________________________________________________________
78. Capital assessed based upon risk profile of the bank that seeks to measure economic realities of the risks is
called?
a. Regulatory capital
b. Risk capital
c. Paid up capital
d. Strategic capital
____________________________________________________________________________________________
73. C 74. A 75. B
76. C 77. D 78. B
79. Basel Committee (BCBS) possess formal super national supervisory authority and its conclusions have legal
force:
a. TRUE
b. FALSE
c. Through World Bank
d. Through the central bank of the country
____________________________________________________________________________________________
80. Who is the Chairman of Credit Risk Management Committee?

a. Managing director/CEO
b. Executive Director
c. General Manager
d. Senior Executive Director
____________________________________________________________________________________________
81. India is a member of the group of G 10 countries

a. Yes
b. No
c. Permanent Member
d. Sub Member
____________________________________________________________________________________________
82. Collateralized debt obligations is .......

a. form of asset backed securities
b. may have junior and senior tranches
c. Junior tranches have lower risk
d. senior tranches carry higher risk
____________________________________________________________________________________________
83. For the first time, in which year Basel Committee came up with Capital Accords for banks?
a. 1985
b. 1988
c. 1990
d. 1992
____________________________________________________________________________________________
84. Which of the following are included in the definition of Operation Risk at large?
a. Business risk, Strategic risk and reputational risk
b. credit risk, market risk and liquidity risk
c. People, Processes and systems
d. all the options
____________________________________________________________________________________________
79. B 80. D 81. B
82. D 83. B 84. C
85. How much capital, as a percentage of risk weighted assets, should a bank carry to meet the Basel II
requirements?
a. 8%
b. 7%
c. 10%
d. 12%
____________________________________________________________________________________________
86. Which types of risks are addressed to internal analysis?

a. Credit risk
b. Operational risk
c. Market risk
d. All the above
____________________________________________________________________________________________
87. What are all the three pillars of Basel II structure?

a. minimum capital requirements , supervisory review process and market discipline
b. transparency, minimum disclosures and financial aspects
c. banks, credit risk, operational risk
d. None
____________________________________________________________________________________________
88. Credit rating/credit scoring for all exposures of a bank will necessarily have to be ensured
a. Only in the case of Standardized approach
b. Only in the case of advanced approaches
c. For both the approaches
d. For all the exposures of the Bank
____________________________________________________________________________________________
89. Supervisory process of the Basel II framework is intended to

a. Ensure that banks have adequate capital to support all the risks in their business
b. Encourage banks to develop and use better risk management techniques in monitoring and managing their
risks
c. Both the above
d. None of the above
____________________________________________________________________________________________
90. What are all the options available to compute Capital for credit risk under Basel II?
a. Standardized approach, risk management measurement approach
b. Standardized approach, internal rating based approach, advance measurement approach
c. Standardized approach, foundation internal rating based approach, advance internal rating based approach.
d. Standardized approach, foundation internal rating based approach, advance measurement approach
____________________________________________________________________________________________
85. A 86. D 87. A
88. D 89. C 90. C
91. What is the cut off date to continue certain specific prescription of Basel II capital adequacy framework continue
to apply along with Basel III?
a. 31.03.2019
b. 31.03.2018
c. 31.03.2017
d. 31.03.2016
____________________________________________________________________________________________
92. What are all the proposals introduced in June 1999 by Basle Committee reforming its 1988 Capital Accord?
a. Settlement risk management
b. Capital requirements
c. Supervisory review
d. All the above
____________________________________________________________________________________________
93. What is the requirement of Capital under Basel accord?

a. The maximum capital that is required to be maintained
b. The minimum capital that is required to be maintained
c. The capital as specified by the regulatory authority is required to be maintained
____________________________________________________________________________________________
94. Which of the following risks that the banks are generally exposed to and are not captured or not fully captured in
regulatory CRAR?
a. settlement risk, liquidity risk
b. reputational risk, strategic risk
c. risk of under-estimation of credit risk under
d. all the above
____________________________________________________________________________________________
95. What are all the duties of Risk Management Committee for credit?
a. Implementation of Risk Management Policy for Credit/strategy approved by the Board
b. Monitoring Credit Risk on a Bank wide basis and ensuring compliance with limits approved by the Board
c. Regulatory/Legal compliance
d. 1 & 2
____________________________________________________________________________________________
96. What are the approaches for Credit risk according to Basel II ?
a. Standardised approach
b. Internal Rating based approach - Foundation
c. Internal Rating based approach - Advanced
d. all the above
____________________________________________________________________________________________
91. C 92. D 93. C
94. D 95. D 96. D
97. What is meaning of PD according to Basel framework?

a. Preferential deposit
b. Probability of default
c. Priority deposit
d. all the above
____________________________________________________________________________________________
98. what is the maximum ceiling amount of loan to an individual entity for considering a loan as part of retail
portfolio, for the purpose of CRAR under Basel 2?
a. Rs. 10 cr
b. Rs.5 cr
c. Rs.2 cr
d. Rs.1 cr
____________________________________________________________________________________________
99. Which part of the Basel structure, the disclosures relating to various aspects of banking falls under?
a. Pillar 1 requirement of Basel 2
b. Pillar 2 requirement of Basel 2
c. Pillar 3 requirement of Basel 2
d. all the above
____________________________________________________________________________________________
100. Under what component of risk, Measurement of the amount of the facility that is likely to be drawn if a default
occurs represents?
a. Loss Given Default
b. Exposure at Default
c. Probability of Default
d. Maturity
____________________________________________________________________________________________
101. What risk weightage Loans fully secured by mortgage on occupied residential property attracts?
a. '0%
b. '20%
c. '50%
d. '100%
____________________________________________________________________________________________
102. What is the purpose of classification of risks?

a. ensure capital adequacy
b. helpful in framing loan policies
c. helpful to banks for evolving good control systems
____________________________________________________________________________________________
97. B 98. B 99. C
100. B 101. C 102. A
103. Why the Basel Committee has laid down certain norms for capital structure of banks?
a. to strengthen banks as regards their capital base
b. to bring about more equity holing by the public
c. to reduce Govt. holding in banking
d. to promote uniform capital requirements so that banks from different countries may compete with one
another on a level playing field
____________________________________________________________________________________________
104. The minimum capital adequacy ratio for India is

a. Higher than prescribed by Basel II
b. same as for other countries
c. lower than suggested by Basel II
d. None
____________________________________________________________________________________________
105. What do you mean by Regulatory Capital?

a. Minimum capital required as per the regulator
b. The minimum capital required by Govt. of India as defined under Basel I
c. The maximum capital that can be raised by a bank
____________________________________________________________________________________________
106. Under what category of exposure the Exposures to Government of a country or its Central Bank falls?
a. Multilateral development Banks ( MDBs)
b. Corporate Exposure
c. Sovereign exposures
d. All the above
____________________________________________________________________________________________
107. What do you mean by 'Internal Rating Based approach IRB?

a. is an Advanced approach for calculating regulatory capital for credit risk
b. implies that the bank has its own "Internal rating system "for its credit exposures
c. is a method for calculating regulatory capital
d. All the above
____________________________________________________________________________________________
108. What for different Pools for homogenous exposures are created?
a. Retail exposures composed of small loans
b. Personal loans, auto loans, mortgage loans , credit card loans
c. Crop loans, tractor loans which are small retail banks
d. For estimating the risk component PD, LGD and EAD of the identified pools
____________________________________________________________________________________________
103. D 104. A 105. A
106. C 107. D 108. D
109. What type of credit reports CIBIL provides?

a. Commercial segment only
b. Consumer (individuals) segment only
c. Both commercial and consumer segments
d. Defaulters only
____________________________________________________________________________________________
110. What is the initial implementation date of Basel-III recommendations in India?

a. 01.01.2013
b. 31.03.2013
c. 01.04.2013
d. 30.09.2013
____________________________________________________________________________________________
111. Basel III recommendations shall be completely implemented in India by

a. 31.03.2019
b. 31.03.2018
c. 31.03.2017
d. 31.03.2016
____________________________________________________________________________________________
112. Basel III capital regulations were released by Basel Committee on Banking supervision (BCBS) during
__________ as a Global regulatory Framework for more resilient banks and banking systems
a. Dec-10
b. Mar-11
c. Dec-11
d. Dec-12
____________________________________________________________________________________________
113. What are all the options available to compute capital Under Basel III?
a. Standardized approach, risk management measurement approach, advance measurement approach
b. basic indicator approach, standardized approach, advance measurement approach
c. Standardized approach, basic indicator approach , risk measurement approach
d. basic indicator approach, advance measurement approach and internal risk based approach
____________________________________________________________________________________________
114. At what level a bank in India has to comply with capital adequacy ratio requirements?
a. Consolidated ( group) level after consolidating the assets and liabilities of its subsidiaries / joint ventures
b. Solo level
c. Overseas operations of the bank under 1 and 2
d. All the above
____________________________________________________________________________________________
109. C 110. C 111. A
112. D 113. B 114. D
115. In India, the banks are required to maintain a minimum pillar I capital to risk weighted assets ratio ( or minimum
total capital to risk weighted assets ratio) of __________ as on ____________
a. 8%, 31st Mar each year
b. 9%, 31st Mar each year
c. 8%, on-going basis
d. 9%, on-going basis
____________________________________________________________________________________________
116. What are the ratios banks in India are required to follow in computation of capital for Basel III accord?
a. Common equity tier I capital ratio
b. Additional Tier I capital ratio
c. Tier 2 capital ratio
d. All the above
____________________________________________________________________________________________
117. Which of the following risks, banks have to take into account to calculate capital adequacy ratio?
a. credit risk and operational risk
b. credit risk and market risk only
c. market risk and operational risk only
d. credit risk, market risk and Operational risk
____________________________________________________________________________________________
118. Which of the following statement regarding the Total regulatory capital under Basel III is correct?
a. total regulatory capital is sum of Tier I capital and Tier II capital
b. Tier I capital is called 'going-concern' capital and Tier 2 capital
c. Tier I capital comprises common equity Tier I and additional Tier I
d. All the above
____________________________________________________________________________________________
119. What is the minimum Tier-1 capital banks in India have to maintain as per Basel III?
a. 5.5%
b. 7%
c. 9%
d. 11%
____________________________________________________________________________________________
120. What is the risk weightage for capital charge for credit risk on the basis of standardized approach for home
loan up to Rs. 20 lac where loan to value ( LTV) ratio is 90%?
a. 20%
b. 50%
c. 75%
d. 100%
____________________________________________________________________________________________
115. D 116. D 117. D
118. D 119. B 120. B
121. What is the risk weightage for capital charge for credit risk on the basis of standardized approach for
commercial real estate - residential building?
a. 20%
b. 50%
c. 75%
d. 100%
____________________________________________________________________________________________
122. What is the risk weightage for capital charge for credit risk on the basis of standardized approach for exposure
to commercial real estate?
a. 20%
b. 50%
c. 75%
d. 100%
____________________________________________________________________________________________
123. Which of the following exposures the risk weightage for capital charge for credit risk on the basis of
standardized approach does not match?
a. venture capital - 150%
b. consumer credit or personal - 125%
c. credit card - 125%
d. capital market exposure - 100%
____________________________________________________________________________________________
124. What is the risk weightage for capital charge for credit risk on the basis of standardized approach for staff
loans secured by superannuation benefits?
a. 20%
b. 50%
c. 75%
d. 100%
____________________________________________________________________________________________
125. Convertible debentures carry an element of equity shares

a. False
b. True
c. Difficult to say
d. None
____________________________________________________________________________________________
126. Where do the risk of losses arising from movements in market prices in on-balance sheet and off-balance
sheet positions are placed as per the Basel - 3 accord?
a. credit risk
b. market risk
c. pricing risk
d. liquidity risk
____________________________________________________________________________________________
121. C 122. D 123. D
124. A 125. B 126. B
127. What is the capital charge for specific risk under market risk in accordance with the risk warranted by external
rating of the counter-party under Basel III?
a. 9%
b. 9.75%
c. 10.5%
d. 11.25%
____________________________________________________________________________________________
128. What is the capital charge for general market risk under the market risk on gross equity position, under Basel
III?
a. 9%
b. 9.75%
c. 10.5%
d. 11.25%
____________________________________________________________________________________________
129. What is the risk weightage under Basel III for open foreign currency and open gold position?
a. 50%
b. 75%
c. 100%
d. 125%
____________________________________________________________________________________________
130. What is the capital charge for open foreign exchange positions and open gold positions, under Basel III, for
market risk?
a. 6%
b. 7%
c. 8%
d. 9%
____________________________________________________________________________________________
131. What is the type of risk of loss resulting from inadequate or failed internal processes, people and systems or
from external events is called?
a. credit risk
b. operational risk
c. market risk
d. reputation risk
____________________________________________________________________________________________
132. Which of the following is part of operational risk as per Basel III?
a. legal risk
b. reputational risk
c. strategic risk
d. all the above
____________________________________________________________________________________________
127. D 128. A 129. C
130. D 131. B 132. A
133. How many years of fixed percentage (denoted as alpha) of positive annual gross income , banks must hold as
capital for operational risk under Basel III?
a. 2 years
b. 3 years
c. 5 years
d. at bank discretion
____________________________________________________________________________________________
134. How much amount of capital banks must hold for operational risk (denoted as alpha) of positive annual gross
income under Basel III by using the Basic Indicator Approach ?
a. 8%
b. 9%
c. 12%
d. 15%
____________________________________________________________________________________________
135. Under Pillar-2 of Basel III, the banks are required to have a Board approved ICAAP and assess capital
accordingly. What does ICAAP stands for?
a. Internal Capital Adequacy Assessment Procedure
b. Internal Capital Adequacy Approved Process
c. Internal Capital Adequacy Assessment Process
d. Internal Capital Assessment Approved Process
____________________________________________________________________________________________
136. What is the purpose of Credit Conversion Factors (CCF)?

a. To convert Off balance sheet items into credit exposure equivalents
b. Used to get the value of 'Exposure at default (EAD)' to be used in further calculations
c. 1 & 2
d. None
____________________________________________________________________________________________
137. What do you mean by Corporate exposure?

a. A bank's exposure to a public limited company
b. A bank's exposure to a private limited company
c. Debt obligation of a Corporation, partnership, or proprietorship-not including loans to Small & medium sized
enterprises (SMEs)
d. None
____________________________________________________________________________________________
138. Which of the following are the Risk components?

a. Probability of Default
b. Loss Given Default
c. Exposures at Default
d. All the above
____________________________________________________________________________________________
133. B 134. D 135. C
136. A 137. C 138. D
139. Which of the following are taken into account under the Foundation IRB Approach (FIRB) for calculation Credit
risk?
a. Risk weights are based on internal estimates of default probabilities
b. Rating & Default Probabilities to be decided by the Bank
c. There are a few other parameters given by the Regulator - RBI
d. All the above
____________________________________________________________________________________________
140. What do you mean by EAD?

a. Exposure at Default
b. Exposure as on date
c. Exposure availed on date
____________________________________________________________________________________________
141. In order to improve the quality of capital, under Basel III, Tier I capital would predominantly consist of:
a. Common equity, Tier I capital and Tier 2 capital
b. Tier 1, Tier 2 and Tier 3 capital
c. Tier I capital
d. common equity
____________________________________________________________________________________________
142. What is the threshold limit to classify a firm as large borrower Under Basel III?
a. those which have total assets greater than or equal to 1000 billion USD
b. those which have total assets greater than or equal to 100 billion USD
c. those which have total assets greater than or equal to 50 billion USD
d. those which have total assets greater than or equal to 1 billion USD
____________________________________________________________________________________________
143. What is the minimum ratio of capital conservation buffer prescribed under Basel 3 in the form of common
equity?
a. 3%
b. 2.5%
c. 2%
d. 1%
____________________________________________________________________________________________
144. At what discounted rate the revaluation reserves are taken into capital under Basel III?
a. 20%
b. 50%
c. 75%
d. without any discount
____________________________________________________________________________________________
139. D 140. D 141. D
142. B 143. B 144. B
145. Which of the following falls part of capital funds?

a. Common equity Tier I capital
b. Additional Tier I capital
c. Tier II capital
d. All the above
____________________________________________________________________________________________
146. What is the range of counter cyclical capital buffer created under Basel 3?
a. 0 to 2.5% common equity
b. 0 to 2.5% of risk weighted assets
c. 0 to 1% of common equity
d. 0 to 1% of risk weighted assets
____________________________________________________________________________________________
147. Which of the following supplements the risk based capital requirement by a non-risk based, under Basel III?
a. common equity
b. capital conservation reserve
c. counter cyclical capital buffer
d. leverage ratio
____________________________________________________________________________________________
148. Which of the following loans do not carry Risk weightage of 125% as per our Credit Risk Management Policy?
a. consumer credit
b. commercial real estate
c. personal loans
d. capital market exposure
____________________________________________________________________________________________
149. What is the minimum capital requirement for banks who wants to enter into insurance sector for underwriting
with-risk business?
a. 8%
b. 9%
c. 10%
d. 12%
____________________________________________________________________________________________
150. What you call a part of credit exposure of a bank that will not be recovered in the event of default on a
specified obligation?
a. loss given default
b. credit loss risk
c. counterparty default
d. credit exposure risk
____________________________________________________________________________________________
145. D 146. A 147. D
148. B 149. C 150. A
151. What is Leverage Ratio as per Basel III?

a. Ratio of Bank capital to Total Assets
b. Ratio of Bank profit to Total Assets
c. Ratio of Bank assets to Total Profit
d. Ratio of Current Assets to Current Liabilities
____________________________________________________________________________________________
152. If a bank's risk weighted assets equal Rs. 100,000,000, what is this bank’s common equity requirement plus
the capital conservation buffer , according to Basel III?
a. 4500000
b. 6000000
c. 7000000
d. 7500000
____________________________________________________________________________________________
153. Which among the following is NOT a pillar of Basel III?

a. Minimum capital standards
b. Supervisor review
c. Market discipline
d. consolidation of Assets
____________________________________________________________________________________________
154. Capital Adequacy Ratio is a thermometer of Bank’s health. It is the ratio of a bank’s __
a. Capital to its risk
b. risk to capital
c. Capital to assets
d. Capital to liabilities
____________________________________________________________________________________________
155. Which of the following types of risks are used in calculation of Capital to Risk (Weighted) Assets Ratio
(CRAR)?
a. Credit Risk
b. Market Risk
c. Operational Risk
d. All the above
____________________________________________________________________________________________
156. Which is not employed for credit risk mitigation purposes ?

a. Futures
b. Collateral
c. Credit derivatives
d. Guarantees
____________________________________________________________________________________________
151. D 152. C 153. D
154. A 155. D 156. A
157. What is the tool majority of banks are using for computation of market risk?
a. secondary market credit risk
b. Interest rate risk
c. Value-at-risk
d. capital adequacy
____________________________________________________________________________________________
158. Which of the following risks are not identified in capital adequacy?
a. Market risk
b. Interest-rate risk
c. FX risk
d. Operational risk
____________________________________________________________________________________________
159. Addressing liquidity risk entails

a. building strong client base
b. having dedicated workforce
c. maintain always excess liquidity
d. building capacity to raise resources at reasonable costs
____________________________________________________________________________________________
160. A risk cannot be transferred but can be

a. eliminated
b. absorbed
c. shared
d. ignored
____________________________________________________________________________________________
161. The Bank's Board should not have

a. Risk management responsibility
b. Day - today responsibility
c. Any responsibility
d. Risk management policy
____________________________________________________________________________________________
162. Risk avoidance is not desirable because

a. it is not possible
b. it is not allowed
c. it means losing out on an opportunity or potential profits
d. it is simple
____________________________________________________________________________________________
157. C 158. C 159. D
160. C 161. B 162. C
163. The change in risk management culture is characterized by

a. risk becoming absent
b. risk becoming insignificant
c. substitution of concepts like , "anticipate, prevent, monitor, mitigate 'for concepts like inspect , detect and
react
d. risk being avoided
____________________________________________________________________________________________
164. Duration is expressed in

a. rupees
b. percentage
c. years
d. cash flows
____________________________________________________________________________________________
165. When the gap is positive and Interest rates rise?.

a. decreases
b. remains unchanged
c. increases
d. becomes zero
____________________________________________________________________________________________
166. Duration is defined as____ to receive all cash flows from financial instrument
a. Time of maturity
b. Average time of maturity
c. Weighted average time of maturity
d. Remaining maturity
____________________________________________________________________________________________
167. What is the simple way of measuring Credit risk?

a. expected loan losses, based on past experiences over a chosen time
b. by way of credit rating
c. the amount by which actual losses exceed expected loss
____________________________________________________________________________________________
168. What is the objective of measuring and quantification of risks?

a. quantify the exposure
b. manage and control risks
c. to provide capital in proportion to risk
d. to increase the size of the loan book
____________________________________________________________________________________________
163. C 164. C 165. C
166. C 167. B 168. C
169. What does the Value at Risk (VaR) of 95% indicates?

a. VaR at 95% confidence level implies a 5% probability of incurring the loss
b. VaR at 95% confidence level,
c. It is the part of investment
____________________________________________________________________________________________
170. Who has to carryout the ICAAP under Supervisory review process for Capital adequacy assessment?
a. The Central Bank of a country
b. The Bank itself which is required to ensure its own capital adequacy
c. The auditors
d. by the Lead Bank
____________________________________________________________________________________________
171. What is credit risk?

a. Current value of the collateral security deteriorates against the interest of the bank
b. Either an inability or an unwillingness of the borrower to perform as contracted
c. Insurance company rejects certain claims
d. None
____________________________________________________________________________________________
172. Chief Risk Officer deals with

a. Credit risks
b. Market risks
c. Operational risks
d. All the above
____________________________________________________________________________________________
173. Credit Policy & Procedures Committee ( CPPC ) monitors

a. Credit risks
b. Market risks
d. All the above
____________________________________________________________________________________________
174. Risk Management Committee of the Board ( RMCB) monitors

a. Market risks
b. Credit risks
d. All the above
____________________________________________________________________________________________
169. A 170. B 171. B
172. D 173. A 174. D
175. What do you mean by 'Adverse Selection' ?

a. Comparing prices quoted by competitors for borrowers who are also perched in the same rating / quality
b. Price-cutting for the sake of market share
c. Financing a defaulter of another bank
d. All the above
____________________________________________________________________________________________
176. What does the risk rating system reveal?

a. The overall risk of lending and as a critical input for setting pricing
b. Present meaningful information for review and management of loan portfolio
c. Facilitate the credit guaranteeing authorities to be aware of the loan quality
d. All the above
____________________________________________________________________________________________
177. What is a Bond?

a. An instrument issued for a period of more than one year with the purpose of raising capital by borrowing
b. Promise to repay the principal as well as interest ( coupons) on a specific date
c. Both the above
____________________________________________________________________________________________
178. Which of the following is an example of upward migration?

a. A borrower rated 'AAA' last year is rated ÄA" this year
b. A borrower rated 'AA' last year is rated "AAA" this year
c. 1 & 2 are correct
d. 1 & 2 are incorrect
____________________________________________________________________________________________
179. What is the possible action if portfolio exposure to any single industry is not performing well?
a. May take steps to improve the quality standards for sanction process , risk evaluation and post sanction loan
follow up
b. The entry level criteria may be enhanced to insulate the portfolio from further deteriorate
c. Undertake rapid portfolio reviews
d. All the above
____________________________________________________________________________________________
180. What do you mean by 'Substantial exposure limit' ?

a. The exposure of a single borrower exceeds 10% of the total lending of the bank
b. The exposure of a single borrower exceeds a threshold limit as decided in the loan policy of the bank
c. Total loans of the borrower exceeding the capital of the bank
d. None
____________________________________________________________________________________________
175. B 176. D 177. C
178. B 179. D 180. B
181. Prudential limits are

a. Borrower specific limit on large credit exposure to control the magnitude of credit risk
b. Ensuring RBI's prudential norms on exposure to single borrower or borrower-group
c. 1 & 2
____________________________________________________________________________________________
182. What are all the steps required to adopt the "Advanced approaches "under Basel II?
a. Gap Analysis and Implementation architecture
b. Internal credit rating systems
c. Data management infrastructure and Data analytics
d. All the above
____________________________________________________________________________________________
183. Collateral securities relating to an exposure

a. Prohibits the borrower from availing multiple finance
b. Does not affect the requirement of Regulatory Capital
c. Speeds up the recovery process
d. Provides for improvement in the risk weight
____________________________________________________________________________________________
184. What do you mean by Country Rating?

a. Required to be reckoned when extending loans to borrowers who are operating abroad
b. Takes into account its political stability
c. Takes into account internal debt of its government
d. All the above
____________________________________________________________________________________________
185. What do you mean by 'Experian'?

a. an international credit bureau
b. Upcoming Indian company
c. a NBFC
____________________________________________________________________________________________
186. Who promoted CIBIL organisation?

a. SBI,HDFC
b. Trans Union International In ,
c. Dun & Bradstreet information Services India Private limited
d. All the above
____________________________________________________________________________________________
181. D 182. D 183. B
184. D 185. A 186. D
187. Which of the following information can be obtained from the credit information report (CIR)?
a. Income/Revenue details
b. Details of borrowers' assets
c. Value of asset(s) mortgaged
____________________________________________________________________________________________
188. Who is the for approving and reviewing authority of appropriate operational risk management framework for
the bank?
a. Board of Directors
b. Risk Management committee of the board
c. Operational risk management committee
d. Reserve Bank of India
____________________________________________________________________________________________
189. What do you mean by Corporate governance in a bank?

a. How the Board carries out the function of running the bank
b. The organization structure of the bank
c. Protecting the interest of the shareholders of the bank
d. Putting in place appropriate risk management system in the Bank
____________________________________________________________________________________________
190. Who normally fix risk limits for business units?

a. Board of directors
b. Risk Management committee of the board
c. Head of business units
d. Senior management
____________________________________________________________________________________________
191. Which of the following is the basis for benchmark risk governance rating?
a. Policies
b. Methodologies
c. Infrastructure
d. All the above
____________________________________________________________________________________________
192. Which of the following is not included in identification of Market risk?

a. Interest rate risk
b. Commodity price risk
c. Model risk
d. Foreign Exchange risk
____________________________________________________________________________________________
187. D 188. A 189. A
190. B 191. D 192. C
193. What is the result of Risk mitigation?

a. Reduce volatility
b. Reduce upside potential
c. Counter party risk
d. All the above
____________________________________________________________________________________________
194. What type of interest rate risk premature payment of a term loan will result in?
a. Basis risk
b. Yield curve risk
c. Embedded option risk
d. Mismatch risk
____________________________________________________________________________________________
195. Under which bucket the core portion of Cash credit advances are shown?
a. 1-3 year time bucket
b. over 3 year time bucket
c. over 5 years time bucket
____________________________________________________________________________________________
196. Under which bucket the Term Loans are shown?

a. Interest and principal of the loan under residual maturity bucket
b. Principal under residual maturity bucket
c. all in 5 year and above bucket
____________________________________________________________________________________________
197. Market value of an asset is conceptually equal to

a. present value of current and future cash flows from the asset and liability
b. future value of current and future cash flows from that asset and liability
c. None of the above
d. Present value of asset and future value of liability
____________________________________________________________________________________________
198. Provisions and inter office adjustments are

a. Rate sensitive
b. Rate non sensitive
d. All the above
____________________________________________________________________________________________
193. D 194. C 195. A
196. A 197. A 198. B
199. Which of the following is true statement regarding Risk ?

a. Risk associated with portfolio is always less than the weighted average of risks of individual items in portfolio
b. Risk associated with portfolio is always more than weighted average of risks of individual items in portfolio
c. Risk associated with portfolio is equal to weighted average of risks of individual items in portfolio
d. Risk of the portfolio cannot be related to the risks in individual items.
____________________________________________________________________________________________
200. Systemic risk can be diversified

a. True
b. False
c. Partly true
d. Partly false
____________________________________________________________________________________________
201. Net Interest income is

a. Interest earned on advances
b. Interest earned on investments
c. Total interest earned on advances and investment
d. Difference between interest earned and interest paid
____________________________________________________________________________________________
202. Interest rate risk is a type of

a. credit risk
b. market risk
c. operational risk
d. all the above
____________________________________________________________________________________________
203. The risk that arises due to worsening of credit quality is

a. Intrinsic Risk
b. Credit spread risk
c. Portfolio risk
d. Counterparty risk
____________________________________________________________________________________________
204. Bond with 'BBB' rating will carry lower interest rate than one with 'AA' rating
a. False
b. True
c. Difficult to say
d. None
____________________________________________________________________________________________
199. D 200. B 201. D
202. B 203. B 204. A
205. The shares of software companies carry high P/E ratio

a. False
b. True
c. Difficult to say
d. None
____________________________________________________________________________________________
206. Capital charge for credit risk requires input for PD, LGD, EAD and M. Under advances IRB approach, who
provide the input for LGD
a. Bank
b. Supervisor
c. Function provided by BCBS
____________________________________________________________________________________________
207. What is the objective of liquidity management?

a. Ensure profitability
b. Ensure liquidity
c. Either of two
d. Both A and B
____________________________________________________________________________________________
208. Why banks need liquidity?

a. Meet deposit withdrawal
b. Fund lost demands
c. Both of them
d. None of them
____________________________________________________________________________________________
209. Adequacy of bank's liquidity position depends upon

a. Sources of funds
b. Anticipated future funding needs
c. Present and future earnings capacity
d. All of the above
____________________________________________________________________________________________
210. Deregulated environment has narrowed spreads of the banks

a. True
b. False
c. Difficult to say
d. None
____________________________________________________________________________________________
205. B 206. A 207. D
208. C 209. D 210. A
211. Asset Liability management is only management of maturity mismatch and has no bearing on profit
augmentation
a. True
b. False
c. Difficult to say
d. None
____________________________________________________________________________________________
212. Net Interest Margin is also known as 'Spread'

a. True
b. False
c. Difficult to say
d. None
____________________________________________________________________________________________
213. Which of the following better explains the meaning of risk?

a. loss arising on happening of some event
b. loss arising on non-happening of some event
c. probability of loss that could arise due to uncertainty
d. risk due to loss as a result of uncertainty
____________________________________________________________________________________________
214. Which one out of the following is objectives of the Loan Review mechanism?
a. Provide the top management with information on credit sanction process, risk evaluation and post-sanction
loan follow-up
b. To make classification under IRAC norms
c. Loan documentation
d. Fixing up accountability for lapses
____________________________________________________________________________________________
215. What are all the characteristics of standardized approach?

a. Based on external agencies model
b. Internal rating based model
c. standard formulae
d. all the above
____________________________________________________________________________________________
216. What do you mean by RSA?

a. Rate sensitivity assets
b. Risk sensitivity assets
c. Risk for securitisation assets
____________________________________________________________________________________________
211. B 212. A 213. C
214. A 215. D 216. D
217. IN the standardized approach, into how many business lines bank's activities are divided into?
a. 4
b. 6
c. 8
d. 10
____________________________________________________________________________________________
218. What are all included in the Commercial Credit information report?
a. Borrower information
b. Account details
c. none of the above
d. both a & b
____________________________________________________________________________________________
219. What is the periodicity for review of CRM Policy in our Bank?
a. 6 months
b. 9 months
c. 12 months
d. 15 months
____________________________________________________________________________________________
220. What is the threshold limit of conducing Legal audit to be conducted for accounts, where mortgage of property
is involved has been put in place?
a. 10 lakhs
b. 50 lakhs
c. 100 lakhs
d. 500 lakhs
____________________________________________________________________________________________
221. What is the periodicity of conducting legal audit in case of all credit exposure of Rs.5.00 Crores and above?
a. 1 year
b. 3 years
c. 2 years
d. 5 years
____________________________________________________________________________________________
222. What is the threshold limit for obtaining two independent values of properties, accepted as security, in case of
non structured loan products?
a. 5 crores
b. 3 crores
c. 10 crores
d. 1 crore
____________________________________________________________________________________________
217. C 218. D 219. C
220. C 221. B 222. A
223. What is the threshold limit for obtaining two independent values of properties, accepted as security in case of
all structured loan products including Home loans?
a. 5 crores
b. 3 crores
c. 10 crores
d. 1 crore
____________________________________________________________________________________________
224. What is the threshold limit for conducting Pre - Release Audi for all advances (fresh or enhancement)
including structured loan products other than Home Loans and Plot loans?
a. Rs. 50 lakhs
b. Rs. 25 lakhs
c. Rs. 1 crore
d. Rs. 10 lakhs
____________________________________________________________________________________________
225. What is the Sub Ceiling fixed to Renewable Energy under Power Sector out of overall exposure of Power
sector?
a. 5%
b. 10%
c. 15%
d. 20%
____________________________________________________________________________________________
226. Audited financial statements need not be insisted by the branches in case of finance to non-corporate
borrowers (both existing and new) for sanction/renewal/enhance-ment of aggregate credit limit upto Rs.-----lakhs
(fund based/non-fund base
a. 1 lakh
b. 5 lakhs
c. 10 lakhs
d. 20 lakhs
____________________________________________________________________________________________
227. What is the minimum exposure for RAM Rating?

a. Rs. 50 lakhs
b. Rs. 25 lakhs
c. Rs. 1 crore
d. Rs. 10 lakhs
____________________________________________________________________________________________
228. Who is nominated as custodian for CRM policy in our Bank?

a. GM(HRM)
b. GM (credit)
c. GM (Accounts)
d. GM (Risk Management)
____________________________________________________________________________________________
223. D 224. A 225. C
226. D 227. A 228. D
229. Who is the Chairman of the RMC?

a. MD & CEO
b. Chairman
c. Board of directors
d. GM (Risk Management)
____________________________________________________________________________________________
230. What is the method employed for assessment of working capital requirements for Educational Institutions,
Hospitals, Hotels and Real Estate Developers?
a. Turnover Method
b. Cash Budget System
c. MPBF 2nd method of lending
____________________________________________________________________________________________
231. What is the entry level obligor rating (internal) in case of project rating, except for Public Sector Undertakings
(PSU) for all fresh sanctions?
a. P1
b. P3
c. P4
d. P2
____________________________________________________________________________________________
232. What is the entry level obligor rating (internal) in case of fresh sanctions?
a. AAA
b. AA
c. BB
d. BBB
____________________________________________________________________________________________
233. Which of the following categories of loans could be priced without reference to the MCLR Rate?
a. DRI advances
b. loans to our own employees
c. loans to banks‘ depositors against their own deposits
d. All the above
____________________________________________________________________________________________
234. What is the threshold limit for revaluing Home loan accounts and home loans under SMA / NPA accounts once
in three years?
a. 10 lakhs
b. 50 lakhs
c. 100 lakhs
d. 500 lakhs
____________________________________________________________________________________________
229. B 230. B 231. D
232. D 233. D 234. C
235. In case of valuation of agricultural lands, if the valuation is more than Rs. -------- , valuer should be a body
corporate and should have a Pan India presence or in case of firm being valuers, all partners should be members of
Institution of valuers.
a. Rs. 1 crore
b. Rs. 5 crores
c. Rs. 10 crores
d. Rs. 100 crores
____________________________________________________________________________________________
236. What is the LTV Ratio(%) of residential property up to Rs. 30 lakhs ?

a. 50%
b. 30%
c. 70%
d. 75%
____________________________________________________________________________________________
237. What is the LTV Ratio (%) Commercial Real Estate - Residential Housing (CRE-RH) ?
a. 20%
b. 25%
c. 90%
d. Not applicable
____________________________________________________________________________________________
238. What is the risk weightage for other loans and advances to bank‘s own staff?
a. 25%
b. 50%
c. 75%
d. 100%
____________________________________________________________________________________________
239. When a bank is required to deduct a securitization exposure from regulatory capital, the deduction must be
made___% from Tier 1 and___% from Tier 2?
a. 75%, 25%
b. 25%, 75%
c. 50%, 50%
d. 25%, 25%
____________________________________________________________________________________________
240. Who refinance term Loans sanctioned to Indian Promoters for acquisition of equity in overseas joint ventures /
wholly owned subsidiaries under the refinance scheme?
a. Export Bank
b. Import Bank
c. Exim Bank
d. RBI
____________________________________________________________________________________________
235. C 236. B 237. D
238. C 239. C 240. C
241. What is the maximum period banks can issue performance guarantees?
a. 1 year
b. 3 years
c. 5 years
d. 10 years
____________________________________________________________________________________________
242. What is the threshold limit in case of agricultural exposures for rating under RAM?
a. 10 lakhs
b. 50 lakhs
c. 100 lakhs
d. 500 lakhs
____________________________________________________________________________________________
243. Software driven rating (Risk Assessment Model – RAM) for different segments are in place since
a. 01/01/2008
b. 01/04/2008
c. 01/01/2009
d. 01/04/2009
____________________________________________________________________________________________
244. How many Rating scale are there in RAM rating excluding “D” for NPA borrowers?
a. 5
b. 9
c. 3
d. 10
____________________________________________________________________________________________
245. What rating assigned for customers whose exposure (both fund based and non fund based – domestic) which
are fully secured by 100% cash margin at any point of time?
a. A
b. A+
c. AA
d. AAA
____________________________________________________________________________________________
246. What is the validity period for Rating based on Provisional Company Financial Data?
a. 3 months from the date of filing of IT return
b. 6 months from the date of filing of IT return
c. 3 months from the due date of filing of IT return
d. 6 months from the due date of filing of IT return
____________________________________________________________________________________________
241. D 242. C 243. B
244. B 245. D 246. C
247. In risk management process, various business units, organizational functions or process flows are mapped by
risk type. The exercise can reveal areas of weakness and help prioritize subsequent management action
a. Risk measurement
b. Risk mapping
c. Risk appetite
d. Risk assessment
____________________________________________________________________________________________
248. Risk is a measure of likelihood and what is the other factor?

a. Consequence
b. Resilience
c. Fatality
____________________________________________________________________________________________
249. Which of the following is defined as “the propensity to incur loss”?

a. Exposure
b. Risk
c. Vulnerability
d. Resilience
____________________________________________________________________________________________
250. Proactive risk management is sometimes described as fire fighting

a. True
b. False
c. Difficult to say
d. None
____________________________________________________________________________________________
251. Risk monitoring involves watching the risk indicators defined for the project and not determining the
effectiveness of the risk mitigation steps themselves
a. True
b. False
c. Difficult to say
d. None
____________________________________________________________________________________________
252. What is the objective of securitisation of financial assets?

a. to enable the banks in speedy recovery of bad loans
b. to sell the securities without intervention of the court, only if loan goes bad
c. to acquire assets and then sell the same at profit
d. recycling of funds and reduce concentration risk
____________________________________________________________________________________________
247. B 248. A 249. C
250. B 251. B 252. D
253. Which risk weights among the following does not match under the Under Standard Approach?
a. Venture capital funds & commercial real estate - 150%
b. credit card - 125%
c. personal loans - 125%
d. loan against shares - 100%
____________________________________________________________________________________________
254. Find from followings "find number of a/c s that have suffered rating migration" during 2014-15 Last Rating-A;
No. of a/c - 100; Present Rating: A++ is 1, A+ is 1, A is 79, B+ is 10, B is 4, C is 3 and Default is 2
a. 2
b. 19
c. 21
d. 25
____________________________________________________________________________________________
255. Back testing is done to

a. Test a model
b. Compare model results and actual performance
c. Record performance
____________________________________________________________________________________________
256. A branch sanctions Rs.1 crore loan to a borrower, which of the following risks the branch is taking
a. Credit risk & Interest rate risk
b. Liquidity risk & Operational risk
c. Credit risk
____________________________________________________________________________________________
257. Financial Risk is defined as

a. Uncertainties resulting in adverse variation of profitability or outright losses
b. Uncertainties that result in outright losses
c. Uncertainties in cash flow
d. Variations in net cash flows
____________________________________________________________________________________________
258. In which time bucket the cash be shown?

a. 1 day
b. 2 to 7 days
c. 8 to 14 days
d. One year
____________________________________________________________________________________________
253. D 254. B 255. B
256. C 257. A 258. A
259. Every risk has 100% likelihood

a. True
b. FALSE
c. All the above
____________________________________________________________________________________________
260. Whose responsibility is the management of Risk?

a. Investor
b. Customer
c. Management team
d. Shareholders' team
____________________________________________________________________________________________
261. Risk is expressed in terms of probability and impact

a. True
b. FALSE
c. All the above
____________________________________________________________________________________________
262. What do you mean by RE in risk management parlance?

a. Risk expense
b. Related expense
c. Risk exposure
d. Risk evaluation
____________________________________________________________________________________________
263. Which of the following technique will ensure that impact of risk will be less?
a. Risk avoidance technique
b. Risk Mitigation technique
c. Risk contingency technique
d. All of the above
____________________________________________________________________________________________
264. What is associated with product risk?

a. Control of test item
b. Negative consequences
c. non-availability of test environment
d. Test object
____________________________________________________________________________________________
259. B 260. C 261. A
262. C 263. C 264. D
265. Risk management is important part of a project management

a. True
b. FALSE
c. All the above
____________________________________________________________________________________________
266. Which is/are ways to deal with risk?

a. Mitigate
b. Contingency
c. Collateral
d. All of the above
____________________________________________________________________________________________
267. What is risk?

a. Negative consequence that could occur
b. Negative consequence that will occur
c. Negative consequence that must occur
d. Negative consequence that shall occur
____________________________________________________________________________________________
268. The type of risk in which payments are interrupted by the intervention of foreign governments is considered as
a. channel risk
b. globalization risk
c. state risk
d. country risk
____________________________________________________________________________________________
269. The risk arises from trading of assets because of change in asset prices and exchange rates is classified as
a. asset risk
b. trade risk
c. market risk
d. exchange risk
____________________________________________________________________________________________
270. The risk faced by financial institutions in which advancement of technology does not produce savings in cost is
classified as
a. savings risk
b. advance risk
c. cost risk
d. technology risk
____________________________________________________________________________________________
265. A 266. D 267. A
268. D 269. C 270. D
271. Banks are required to make a no. of disclosures relating to various aspects of banking. Where do these are
shown in the balance sheet?
a. as part of respective asset or liability
b. as part of respective income or expenditure
c. as notes on accounts
d. all or any of the above
____________________________________________________________________________________________
272. When failure of the financial system affects other systems such as insurance market or forex market, such risk
is:
a. liquidity risk
b. settlement risk
c. systemic risk
d. systematic risk
____________________________________________________________________________________________
273. The temporary loans that are allowed by RBI to Govt. from time to time to meet the mismatch position are
called
a. treasury bills
b. dated securities
c. ways and means advances
d. ad hoc treasury bills
____________________________________________________________________________________________
274. Which of the following: The receivables of various loans and obligations are put together and distributed
amongst investors through marketable securities?
a. leasing
b. factoring
c. securitisation
d. forfeiting
____________________________________________________________________________________________
275. A consumer fails to make a payment due on a mortgage loan. This is known as __:
a. Credit Risk
b. Systemic Risk
c. Refinancing Risk
d. Market Risk
____________________________________________________________________________________________
276. Which of the following is India's First Credit Rating Agency ?

a. ICRA
b. CRISIL
c. ONICRA
d. CARE
____________________________________________________________________________________________
271. C 272. C 273. C
274. C 275. A 276. B
277. Which among the following is the criteria for initiating prompt corrective action by RBI?
a. Market Risk
b. Credit Risk
c. Liquidity Risk
d. Low Capital adequacy
____________________________________________________________________________________________
278. Security firms are primarily exposed to

a. credit risks
b. market risks
c. both
d. none
____________________________________________________________________________________________
279. Which direction prices of fixed interest bonds move when interest rates go up?
a. Go up
b. Go down
c. Remain unchanged
d. None
____________________________________________________________________________________________
280. Under what circumstances the Systemic risk arises?

a. Failure of a bank, which is not adhering to regulations
b. Failure of two banks simultaneously due to bankruptcy of one bank
c. Where a group of banks fail due to contagion effect
d. Failure of entire banking system
____________________________________________________________________________________________
281. Falling interest rates cause NAVs of debt mutual fund to go down
a. False
b. True
c. Difficult to say
d. I do not know
____________________________________________________________________________________________
282. Investment in shares and mutual fund (open ended) should be shown in
a. Over 5 year bucket
b. Over 1 year bucket
c. Over 2 year bucket
____________________________________________________________________________________________
277. D 278. B 279. B
280. D 281. A 282. A
283. Current account balance is

a. Rate sensitive
b. Rate non sensitive
d. All the above
____________________________________________________________________________________________
284. VaR is
a. potential worst case loss at a specific confidence level over a certain period of time
b. potential worst case loss over indefinite period of time
c. none of the above
d. potential for gain over a selected period
____________________________________________________________________________________________
285. A bank holds a security that is rated A+. The rating of the security migrates to A, what is the risk that the bank
has faced?
a. Market risk
b. Operational risk
c. Market liquidation risk
d. Credit risk
____________________________________________________________________________________________
286. Investment in Post Office time deposit is

a. Zero risk investment
b. Low risk investment
c. Medium risk investment
d. High risk investment
____________________________________________________________________________________________
287. Which of the following are included in the market risk positions for capital charge requirement under Basel III?
a. risk pertaining to interest rate related instruments in the trading book
b. risk pertaining to equities in the trading book
c. forex risk including open positions in precious metal
d. all the above
____________________________________________________________________________________________
288. Which of the following are part of the trading book of a bank subject to market risk as per Basel III capital
adequacy purpose?
a. securities under HFT and AFS
b. open gold positions and forex positions
c. trading positions in derivatives
d. securities under HTM
____________________________________________________________________________________________
283. B 284. A 285. D
286. A 287. D 288. D
289. If a security has matured and remains unpaid, it attract capital for --------- risk on completion of 90 days
delinquency period
a. credit risk
b. market risk
c. operational risk
d. at discretion of the bank
____________________________________________________________________________________________
290. What form the minimum capital requirement is expressed in terms of two separately calculated charges for
market risk?
a. specific risk and general market risk
b. special risk and general risk
c. liquidity risk and liquidation risk
d. counterparty credit risk and trading partner's risk
____________________________________________________________________________________________
291. What are all the factors that are taken into account to aggregate capital charge for market risk?
a. Interest rate
b. Equity investment
c. Forex and gold open positions
d. All the above
____________________________________________________________________________________________
292. Market risk is the risk of loss in

a. On-balance sheet positions
b. Off-balance sheet positions
c. Arising from movement in market prices
d. All the above
____________________________________________________________________________________________
293. Which of type of risk ALM is concerned?

a. Interest rate risk
b. Liquidity risk
c. credit risk
d. capital risk
____________________________________________________________________________________________
294. Base currency - The currency in which a VaR measure quantifies ----risk
a. Operational risk
b. Credit risk
c. Market risk
d. Concentration risk
____________________________________________________________________________________________
289. A 290. A 291. D
292. D 293. B 294. C
295. The risk that the interest rate of different assets and liabilities may change in different magnitude is called?
a. Embedded risk
b. Maturity risk
c. Basis risk
d. Price risk
____________________________________________________________________________________________
296. A bank expects fall in price of a security if it sells it in the market. What is the risk that the bank is facing ?
a. Market risk
b. Operational risk
c. Asset Liquidation risk
d. Market Liquidation risk
____________________________________________________________________________________________
297. Where the gap method is basically used for?

a. To measure potential losses from off balance sheet exposure
b. For measuring banks interest rate risk exposure
c. To measure maturity mismatch
d. None of above
____________________________________________________________________________________________
298. Under Put option the buyer has

a. Right to buy but not obligation to buy
b. Right to receive interest payments.
c. Right to sell but not obligation to sell
d. None of above
____________________________________________________________________________________________
299. Under Call option the buyer has

a. Right to buy but not obligation to buy
b. right to sell but not obligation to buy
c. right to either sell or buy
d. None of above
____________________________________________________________________________________________
300. In what context the term ICAAP is used?

a. risk management
b. capital adequacy ratio
c. Right to information act
d. dealing with public companies
____________________________________________________________________________________________
295. C 296. C 297. B
298. C 299. A 300. A
301. What type of securities Gilt-edged market deals in?

a. Worn currency notes
b. Bullion and gold
c. Govt. securities
d. Corporate bonds
____________________________________________________________________________________________
302. Where do the risk that loss may arise on account of trading in SLR and other securities by a bank is classified?
a. credit risk
b. investment fluctuation risk
c. trading risk
d. market risk
____________________________________________________________________________________________
303. What is the extent of coverage under Loan Review Mechanism for Standard Accounts?
a. Standard accounts with sanctioned limit of Rs.25 lakhs and above shall be the cut off limit.
b. Standard accounts with sanctioned limit of Rs.28 lakhs and above shall be the cut off limit.
c. Standard accounts with sanctioned limit of Rs.35 lakhs and above shall be the cut off limit.
d. Standard accounts with sanctioned limit of Rs.50 lakhs and above shall be the cut off limit.
____________________________________________________________________________________________
304. Whether Administrative approval is required for credit exposure to Hospitals for considering further exposure of
erstwhile CRE?
a. Yes
b. No
c. Not Applicable
d. On case to case basis
____________________________________________________________________________________________
305. As per CRM Policy, Property accepted as security is to be valued by two independent valuers for property
value of Rs.-----crores and above in case of non structured loan products and SME SLP
a. 1 crore
b. 2 crores
c. 5 crores
d. 10 crores
____________________________________________________________________________________________
306. For other Structured Loan Products, two independent valuations are required for advances exceeds Rs.------
crore.
a. 1 crore
b. 2 crores
c. 5 crores
d. 10 crores
____________________________________________________________________________________________
301. C 302. D 303. D
304. B 305. C 306. A
307. For NBFC minimum investment grade is External rating ------------ grade of CRISIL or equivalent thereof by
other credit rating agencies.
a. "A" grade rating
b. "AA" grade rating
c. "A+" grade rating
d. "AA+" grade rating
____________________________________________________________________________________________
308. As per RMC directions the direct exposure ceiling for Residential Real Estate(RRE) (both FB + NFB) is
a. 50% of the Bank‘s net worth, as on March 31 of the previous year.
b. 75% of the Bank‘s net worth, as on March 31 of the previous year.
c. 100% of the Bank‘s net worth, as on March 31 of the previous year.
d. 175% of the Bank‘s net worth, as on March 31 of the previous year.
____________________________________________________________________________________________
309. What is the cut-off limit over and above which 'Risk based pricing is applicable, basing on combined rating of
RAM?
a. 10 lakhs
b. 25 lakhs
c. 50 lakhs
d. 1 crore
____________________________________________________________________________________________
310. What is the exposure limit for Proprietorship/Limited Liability Partnership under new CRM Policy?
a. 1 crore
b. 10 crores
c. 25 crores
d. 50 crores
____________________________________________________________________________________________
311. What is the exposure limit for Partnership Firm under new CRM Policy?
a. 1 crore
b. 10 crores
c. 25 crores
d. 50 crores
____________________________________________________________________________________________
312. Risk Assessment Model (RAM) developed by CRISIL for Singapore and Colombo branches is in place already
and branches have to rate all the accounts (incorporated in Singapore and Sri Lanka) having an exposure equivalent
to INR ------ lakhs and above.
a. 25 lakhs
b. 50 lakhs
c. 100 lakhs
d. 150 lakhs
____________________________________________________________________________________________
307. A 308. D 309. C
310. C 311. D 312. B
313. As per new CRM Policy what is the standard financial benchmark for Trade and Service accounts?
a. TOL/TNW: 2.0:1
b. TOL/TNW: 3.0:1
c. TOL/TNW: 6.0:1
d. TOL/TNW: 10.0:1
____________________________________________________________________________________________
314. ----------- risk is defined as the possibility of losses associated with default by or diminution in the credit quality
of Borrowers or Counterparties
a. Interest
b. Counter Party
c. Credit
d. Operational
____________________________________________________________________________________________
315. What is the time horizon the default of borrower to calculate Probability of Default (PD)?
a. 6 months
b. 1 year
c. 3 years
d. 5 years
____________________________________________________________________________________________
316. The CRMD is required to remain independent of the credit origination and administration activities and includes
the following functions under Basel II
a. Portfolio monitoring and analytics
b. Credit Appraisal Vetting
c. IT Support
d. All the above
____________________________________________________________________________________________
317. By adopting Capital Risk Appetite what is the Capital adequacy requirement for the Bank?
a. As an internal target, achieve a minimum 12% CRAR, with a Tier 1 Capital of 10%
b. As an internal target, achieve a minimum 10% CRAR, with a Tier 1 Capital of 8%
c. As an internal target, achieve a minimum 9% CRAR, with a Tier 1 Capital of 8%
d. As an internal target, achieve a minimum 8% CRAR, with a Tier 1 Capital of 6%
____________________________________________________________________________________________
318. What is the ratio of quality credit exposure to be maintains as per CRM Policy?
a. Maintaining net NPA levels at 0%
b. Maintaining net NPA levels below 2.50%
c. Maintaining net NPA levels at 5%
d. Maintaining net NPA levels below 10.0%
____________________________________________________________________________________________
313. C 314. C 315. B
316. D 317. A 318. B
319. What do you mean by SMA ?

a. Special Monitoring Accounts
b. Special Mention Accounts
c. Special Monitoring Assets
d. Special Mention Assets
____________________________________________________________________________________________
320. Which method is applicable for the assessment of Working Capital Limit upto Rs.5 Crores (other than trade
segment) in our Bank?
a. MPBF 2nd Method of lending
c. Turnover Method
d. Higher of 'a' or'c'
____________________________________________________________________________________________
321. Which method is applicable for the assessment of Working Capital Limit more than Rs.5 Crores (other than
trade segment) in our Bank?
c. Turnover Method
d. As defined for the particular scheme / product
____________________________________________________________________________________________
322. Which method is applicable for the assessment of Working Capital Limit for Educational Institutions, Hospitals,
Hotels, Real Estate Developers, Infrastructure Projects, Seasonal industries, construction contractors, Software and
others ?
c. Turnover Method
d. As defined for the particular scheme / product
____________________________________________________________________________________________
323. Which committee has been constituted to undertake review of borrowal accounts sanctioned by various
Committees at CO and Zonal Credit Committees?
a. ZLRMC
b. LRMC
c. SAMC
d. ZSAMC
____________________________________________________________________________________________
324. Who is the Chairman of LRMC?

a. GM(I & C)
b. GM(R & L))
c. GM(RMD)
d. Senior most Non Credit General Manager/ Department Head
____________________________________________________________________________________________
319. B 320. D 321. A
322. B 323. B 324. D
325. Individual accounts with limits of Rs.------- Crores and above are monitored by Standard Assets Monitoring
Committee at CO
a. 1 crore
b. 2 crores
c. 5 crores
d. 10 crores
____________________________________________________________________________________________
326. All proposals falling under COLCC (ED), CAC & MC are to be placed to ---------------
a. LRMC
b. Credit Steering Committee (CSC)
c. SAMC
d. ZSAMC
____________________________________________________________________________________________
327. Which of the following is coming under Selective Financing?

a. Tea and Coffee
b. Poultry Advances
c. Glass
d. All the above
____________________________________________________________________________________________
328. All SLPs under Personal Banking Segment and wherever scoring model is prescribed, the entry barrier shall
be -------------
a. BBB
b. BB
c. AA
d. A
____________________________________________________________________________________________
329. Corporate SME means – Exposures between ------- crore and ---------- crore broadly associated with SME
characteristics
a. 1 crore and 5 crores
b. 5 crores and 10 crores
c. 5 crores and 25 crores
d. 10 crores and 25 crores
____________________________________________________________________________________________
330. Small business is one where the total average annual turnover is less than Rs.---------------- crore
a. 1 crore
b. 5 crores
c. 25 crores
d. 50 crores
____________________________________________________________________________________________
325. C 326. B 327. D
328. A 329. C 330. D
331. Different exposure limits (like Single / Group Borrower, Substantial Exposure, Sensitive Sector, Industry-wise
et,) have been fixed to mitigate------------- risk
a. Credit Risk
b. Operational Risk
c. Concentration Risk
d. Market Risk
____________________________________________________________________________________________
332. The Banks should waive margin and security for agricultural loans up to Rs.----------- limit
a. Rs. 25,000
b. Rs. 50,000
c. Rs. 100,000
d. Rs. 500,000
____________________________________________________________________________________________
333. The Banks should waive margin and security for Agri clinic and Agri Business Centre up to Rs.----------------
lakhs limit
a. Rs. 100,000
b. Rs. 500,000
c. Rs. 1,000,000
d. Rs. 2,500,000
____________________________________________________________________________________________
334. To what extent loan amount can be disbursed for advances upto Rs. 25 Lakhs based on the guideline value
for the advances where agricultural property is taken as security?
a. 25%
b. 50%
c. 75%
d. 100%
____________________________________________________________________________________________
335. At what interval home loan accounts under SMA / NPA irrespective of balance outstanding have to be
revalued?
a. Once in a 1 year
b. Once in 2 years
c. Once in 3 years
d. Once in 5 years
____________________________________________________________________________________________
336. In case of difference in valuation of assets done by two independent valuers, the average of the two valuations
may be taken as notional valuation of the property if difference in valuation is ------------ or less
a. 5%
b. 10%
c. 15%
d. 20%
____________________________________________________________________________________________
331. C 332. C 333. B
334. C 335. C 336. C
337. Where a dispute / fraud is to exist in any of the accounts, the collateral in respect of such accounts shall be
made in the CBS environment
a. Zero
b. 25
c. 50
d. 100%
____________________________________________________________________________________________
338. In case of valuation of agricultural lands, if the valuation is more than Rs.---------- crores, valuer should be a
body corporate and should have a Pan India presence or in case of firm being valuer, all partners should be
members of Institution of valuer
a. 5 crores
b. 10 crores
c. 25 crores
d. 50 crores
____________________________________________________________________________________________
339. What is the threshold limit of Pre - Release Audit for advances excluding home loan and plot loan?
a. 5 lakhs
b. 10 lakhs
c. 25 lakhs
d. 50 lakhs
____________________________________________________________________________________________
340. What is the threshold limit for pre release audit for Home Loans and Plot loans?
a. 5 lakhs
b. 10 lakhs
c. 25 lakhs
d. 50 lakhs
____________________________________________________________________________________________
341. Wherever concurrent auditor certifies compliance of terms and conditions in the pre release stage, separate
pre –release audit need to be conducted or not ?
a. Need to be conducted
b. Need not to be conducted
c. Not applicable
d. Case to case basis
____________________________________________________________________________________________
342. What is the quantum of amount for Legal Audit, wherever mortgage of property is involved?
a. 25 lakhs
b. 50 lakhs
c. 100 lakhs
d. 500 lakhs
____________________________________________________________________________________________
337. A 338. B 339. D
340. D 341. B 342. C
343. What is the exposure ceiling to Stock brokers and market makers (both fund based & non fund based i.e.
guarantees)?
a. 2% of the net worth of the Bank as on the previous year end
b. 5% of the net worth of the Bank as on the previous year end
c. 10% of the net worth of the Bank as on the previous year end
d. 12% of the net worth of the Bank as on the previous year end
____________________________________________________________________________________________
344. What is the exposure ceiling to any single stock broking entity including its associates/ inter-connected
companies and single broker?
a. Rs 10 Crore per borrower
b. Rs.25 Crore per borrower
c. Rs 50 Crore per borrower
d. Rs.100 Crore per borrower
____________________________________________________________________________________________
345. What is the risk to mitigate for Exposure levels on Real Estate Sector are proposed?
a. Credit Risk
b. Operational Risk
c. Concentration Risk
d. Market Risk
____________________________________________________________________________________________
346. What is the minimum margin requirement for landed property / building for non-priority sector except MSME ?
a. 20%
b. 30%
c. 40%
d. 50%
____________________________________________________________________________________________
347. What is the minimum margin requirement for priority sector (other than agri and allied activities) and MSME
(Priority & Non-Priority) ?
a. 20%
b. 30%
c. 40%
d. 50%
____________________________________________________________________________________________
348. Under Direct Exposure for Commercial Real Estate, what is the Exposure Ceiling stipulated (FB + NFB) ?
a. 25% of the Bank‘s net worth, as on March 31 of the previous year
b. 50% of the Bank‘s net worth, as on March 31 of the previous year
c. 100% of the Bank‘s net worth, as on March 31 of the previous year
d. 150% of the Bank‘s net worth, as on March 31 of the previous year
____________________________________________________________________________________________
343. D 344. C 345. C
346. D 347. C 348. B
Question Bank :
349. How much percentage is fixed for Global exposure to NBFC sector of Total Exposure to Various Industries as
on previous quarter?
a. 10%
b. 12%
c. 15%
d. 20%
____________________________________________________________________________________________
350. For all Review/Renewal proposals, what is the exposure level for the loans sanctioned under the powers of
Branch manager under ZLRMC at respective Zonal Offices?
a. 25 lakhs
b. 50 lakhs
c. 75 lakhs
d. 100 lakhs
____________________________________________________________________________________________
351. For the accounts to be covered under Credit Audit, what is the limit for Standard borrowal a/cs with rating of
BBB?
a. Rs. 25 lakhs and above
b. Rs. 50 lakhs and above
c. Rs.1 Crore and above
d. Rs. 5 crores and above
____________________________________________________________________________________________
a.
b.
c.
d.
____________________________________________________________________________________________
a.
b.
c.
d.
____________________________________________________________________________________________
a.
b.
c.
d.
____________________________________________________________________________________________
349. D 350. B 351. D

Risk Management

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Question Bank : Risk Management

1. Banks Capital is expressed in terms of _________________

2. Near Miss Events is related to the following

6. Inability to meet the liabilities as they become due is

7. Risk Management is identification, measurement, risk control and risk mitigation.

8. Which of the following is not new innovation of Basel – 3?

11. Basel is the name of _______________

12. What do you mean by BIS?

13. What do you mean by CAR?

14. What do you mean by CRAR?

15. What is the CAR as per Basel – 1 recommendations?

16. What is RWA?

17. Where does the secretariat of Basel Committee located?

18. What is the main objective of the Basel Committee?

19. Which country the city Basel is located?

20. What is first risk identified by the Basel committee – I?

22. Which of the following risks was introduced by Basel – II committee?

23. What is the name of the Basel - II structure?

24. What stands for Pillar -1 of Basel – 2?

25. Pillar-I capital of Basel - 2 is otherwise called as?

26. What is Pillar – 2 of Basel-2 structure?

27. As per Basel accords Pillar-2 Capital is also called as?

28. What do you mean by IRB?

29. What do mean by AIRB?

30. What is the first method of calculation of Credit Risk?

31. What is the first methodology used to measure Operational Risk?

32. What are the two types of Capital as per Basel – I?

35. AMA under risk management concepts relates to ?

36. Asset Liability Management involves bucketing of

37. Which one of the following is not a liability ?

38. Risk stems from mismatch between Assets and Liabilities

39. ALM helps in

40. Market risk is the risk arising out of change/movement in

41. ALM organization structure has at its top

42. Bucketing of ALM is based on

43. One of the following is not a rate sensitive liability

44. Identify the correct statement.

45. An example of non maturing liability is......

46. Who is the custodian of Credit Risk Management Policy?

48. Expand ALCO

49. Expand LRMC

54. Issue of Bank Guarantees in favour of Financial Institutions will be issued by

56. What do you mean by IFRS?

57. Which of the following is a liquidity ratio of Basel – 3?

58. In which risk you can find basis risk?

61. Collapse of Lehman brothers led to formation of ___.

64. Which of the following is a leverage ratio introduced by Basel -3?

72. When Basel III will be fully implemented in India?

70. A 71. C 72. A

75. When from the Capital conservation buffer implemented in India?

77. What are all the Characteristics of 'equity'?

80. Who is the Chairman of Credit Risk Management Committee?

81. India is a member of the group of G 10 countries

82. Collateralized debt obligations is .......

86. Which types of risks are addressed to internal analysis?

87. What are all the three pillars of Basel II structure?

89. Supervisory process of the Basel II framework is intended to

93. What is the requirement of Capital under Basel accord?

97. What is meaning of PD according to Basel framework?

102. What is the purpose of classification of risks?

104. The minimum capital adequacy ratio for India is

105. What do you mean by Regulatory Capital?