the very best for your exams sample questions for caiib bank financial management

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ALL THE VERY BEST FOR YOUR EXAMS
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SAMPLE QUESTIONS FOR
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iCAIIB
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BANK FINANCIAL MANAGEMENT
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a
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Though we had taken enough care to go through the questions, we request everyone to update
yourself with the latest information through RBI website and other authenticated sources. In
case you find any incorrect/doubtful information, kindly update us also (along with the source
link/reference for the correct information) as lot of questions were shared by many people.
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Bank Financial Management

Based on the below given data of a bank’s branch as on 31.03.2017 (in Lakhs), answer the following
questions.
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A/c - Bal - Security - NPA Date
o
A1 - 120 - 40 - 30.09.2016
A2 - 100 - 60 - 30.07.2014 c
A3 - 160 - 80 - 30.06.2015
.
A4 - 120 - 100 - 31.08.2016 t
A5 - 150 - 150 - 31.07.2013 s
A6 - 160 - 0 - 31.10.2015
e
A7 - 200 - 120 - 30.08.2014
t
A8 - 180 - 140 - 31.05.2015
k

c
1. What is the provision required against account Al?
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a. 20
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b. 22
c. 24
b
d. 26
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Ans - d i
a
.........................................
c
2. What is the provision required bagainst account A2?

i
a. 55 i
b. 58 a
c. 64
j
d. 72 .
w

Ans - c
w
.........................................

w
3. What is the provision required against account A3?

a. 96
b. 100
c. 104
d. 160

Ans - b
.........................................
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4. What is the provision required against account A4?

a. 14
b. 20
m
c. 24
d. 25
o
Ans - b
c
.........................................
.

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5. What is the provision required against account A5? s

e
a. 37.5
b. 60 t
k
c. 75
d. 150 c

o
Ans - b
......................................... m

6. What is the provision required against account bA6?

i
a. 40 i
a
b. 64
c. 128 c
d. 160
b

Ans - d i
i
.........................................a

j
7. What is the prov.ision required against account A7?
w
a. 40
w
b. 64
c. 128
w
d. 160

Ans - c
.........................................

8. What is the provision required against account A8?

a. 68
b. 75
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c. 82
d. 96

Ans - b
m
.........................................

Explanation o

c
1. The A/c is NPA on 30.09.2016. So, it is in Sub-Standard category and the provision for Secured-15%
.
and Unsecured-25%
t
s
Secured Amount – 40, Unsecured Amount - 80
e

Provision Required = 40*15% + 80*25% t
k
= 6 + 20
= 26 Lakhs c
.........................................
o

2. The A/c is NPA on 30.07.2014. So, it is in Doubtful (Dm2) category and the provision for Secured-40%
and Unsecured-100%
b
Secured Amount – 60, Unsecured Amount - 40
i
i
a
Provision Required = 60*40% + 40*100%
= 24 + 40 c
= 64 Lakhs
b
.........................................
i
i
3. The A/c is NPA on 30.0a6.2015. So, it is in Doubtful (D1) category and the provision for Secured-25%
and Unsecured-100%
j
.
Secured Amount w– 80, Unsecured Amount - 80

w
Provision Required = 80*25% + 80*100%
= 20 + 80
w
= 100 Lakhs
.........................................

4. The A/c is NPA on 31.08.2016. So, it is in Sub-Standard category and the provision for Secured-15%
and Unsecured-25%

Secured Amount – 100, Unsecured Amount - 20

Provision Required = 100*15% + 20*25%
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= 15 + 5
= 20 Lakhs
.........................................

m
5. The A/c is NPA on 31.07.2013. So, it is in Doubtful (D2) category and the provision for Secured-40%
and Unsecured-100%
o
Secured Amount – 150, Unsecured Amount - 0
c

.
Provision Required = 150*40% + 0*100%
t
= 60 + 0 s
= 60 Lakhs
e
.........................................
t
k
6. The A/c is NPA on 31.10.2015. So, it is in Doubtful (D1) category and the provision for Secured-25%
and Unsecured-100% c

o
Secured Amount – 0, Unsecured Amount - 160
m
Provision Required = 0*25% + 160*100%
= 0 + 160 b
= 160 Lakhs
i
......................................... i
a

7. The A/c is NPA on 30.08.2014. So,c it is in Doubtful (D2) category and the provision for Secured-40%
and Unsecured-100%
b

Secured Amount – 120, Unseicured Amount - 80
i
a
Provision Required = 120*40% + 80*100%
j
= 48 + 80 .
= 128 Lakhs w
.........................................
w

8. The A/c is NPA on 31.05.2015. So, it is in Doubtful (D1) category and the provision for Secured-25%
w
and Unsecured-100%

Secured Amount – 140, Unsecured Amount - 40

Provision Required = 140*25% + 40*100%
= 35 + 40
= 75 Lakhs
.........................................
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Answer the following questions are based on the below given information

a. USD-INR spot and forward rate
Spot USD - 65.60/62
m
O/N - 1/2
TOM - 2/3
2 weeks - 7/8 o
1 month - 15/17
c
2 months - 31/33
.
3 months - 47/50
t
6 months - 95/100 s

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b. The AD loads margin of 10 paisa for purchase transactions and 12 paisa for sale transactions
t
k
1. What is the bid rate for over night dollar?
c
a. 65.59
o
b. 65.60
c. 65.61 m
d. 65.65
b
Ans - c
i
............................................. i
a

2. What is the asking rate for Tom UScD?

b
a. 65.59
b. 65.60 i
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c. 65.61 a
d. 65.65
j
.
Ans - d w
.............................................
w

3. TT buying rate for customer transaction in spot dollar is ......
w

a. 65.50
b. 65.74
c. 65.81
d. 65.84

Ans - a
.............................................
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4. Quote the forward TT buying rate for 2 months USD is ......

a. 65.50
b. 65.74
m
c. 65.81
d. 65.84
o
Ans - c
c
.............................................
.

t
5. USD selling rate for customer transactions in spot dollar is ...... s

e
a. 65.50
b. 65.74 t
k
c. 65.81
d. 65.84 c

o
Ans - b
............................................. m

6. Quote forward TT selling rate for one month USbD ......

i
a. 65.50 i
a
b. 65.74
c. 65.81 c
d. 65.91
b

Ans - d i
i
.........................................a....

j
Bank XYZ has .
Common shares -w 500cr
Statutory reserves - 250cr
w
Capital reserves - 300cr
Balance in P&L Account at the end of the previous FY - 150cr
w
Revaluation reserves - 200cr
Provisions and Loss Reserves - 300cr
Debt Capital Instruments - 200cr
Perpetual Debt Instruments (PDI) - 50cr
Perpetual Cumulative Preference Shares (PCPS) - 50cr
Redeemable Cumulative Preference Shares (RCPS) - 50cr
RWA for credit and operational risk are Rs 12000cr
RWA for market risk Rs 5000cr
Based on the above information, answer the following questions?
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1. what is the amount of Tier-1 capital?

a. 1080cr
b. 1140cr
m
c. 1250cr
d. 1380cr
o
Ans - c
c

.
Tier-1 = Common shares + Statutory reserves + Capital reserves + Balance in P&L Account at the end of
t
the previous FY + Perpetual Debt Instruments (PDI) s
= 500+250+300+150+50
e
= 1250cr
............................................. t
k

2. Calculate the amount of Tier-2 capital? c

o
a. 350cr
b. 475cr m
c. 540cr
d. 840cr b

i
Ans - c i
a

Tier2 = Provisions and Loss Reserves cmaximum 1.25% of risk weighted assets + Debt Capital Instruments
+ Revaluation reserve at 55% discount + PCPS + RCPS
b

= (12000*1.25%) 150+200+(2i00*45%,at 55% discount)90+50+50
i
= 540cr a
.............................................
j
.
3. Calculate the awmount of capital fund?

w
a. 1250cr
b. 1380cr
w
c. 1560cr
d. 1790cr

Ans - d

Total capital fund = Tier-1 capital + Tier-2 capital
= 1250 + 540
= 1790cr
.............................................
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4. What is the capital adequacy ratio of the bank?

a. 10.20 %
b. 10.53 %
m
c. 11.03 %
d. 11.53 %
o
Ans - b
c

.
Capital adequacy ratio = Total Capital fund / Total RWA
t
= 1790 / 17000 = 10.53 % s
.............................................
e

5. What is the amount of minimum capital to support credit and opertational risk as per Basel 3 without
k
capital conservation buffer?
c
a. 1080cr
o
b. 1140cr
c. 1250cr m
d. 1380cr
b
Ans - a
i
i
a
= 12000 * 9% = 1080cr
............................................. c

b
6. What is the amount of minimum capital to support credit and operational risk as per Basel 3 with
capital conservation buffer? i
i
a
a. 1080cr
j
b. 1140cr .
c. 1250cr w
d. 1380cr
w

Ans - d
w

12000 * 11.5% = 1380cr
.............................................

7. What is the amount of minimum Tier 1 to support the credit and operational risk without capital
conservation buffer?

a. 350cr
b. 475cr
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c. 540cr
d. 840cr

Ans - d
m

Tier 1 = 12000 * 7% = 840 cr
............................................. o

c
8. What is the amount of minimum Tier 1 to support the credit and operational risk with capital
.
conservation buffer?
t
s
a. 1080cr
e
b. 1140cr
c. 1250cr t
k
d. 1380cr
c
Ans - b
o

Tier 1 = 12000 * 9.5% = 1140 cr m
.............................................
b
9. What is the amount of minimum Tier 1 to support the market risk without capital conservation
i
buffer? i
a

a. 350cr c
b. 475cr
b
c. 540cr
d. 840cr i
i
a
Ans - a
j
.
Tier 1 = 5000 * 7%w = 350 cr
.............................................
w

10. What is the amount of minimum Tier 1 to support the market risk with capital conservation buffer?
w

a. 350cr
b. 475cr
c. 540cr
d. 840cr

Ans - b

Tier 1 = 5000 * 9.5% = 475 cr
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