CAIIB BFM Recollected Questions: Solved Case Studies & ALM Practice Guide

If you are preparing for the IIBF CAIIB BFM exam. These CAIIB BFM recollected questions are the single most valuable revision tool you can use. They are memory-based numericals that real candidates reported from previous attempts of the Bank Financial Management (BFM) paper.

Why do they matter so much? Because BFM repeats patterns. The exact numbers change.

But the logic behind gap analysis. Net Interest Income (NII) sensitivity and duration stays the same. Master the pattern.

And you can solve almost any variant the examiner throws at you.

In this 2026 guide, you will get the four classic BFM case studies fully laid out, the formulas behind them, a smart study plan, the mistakes that cost candidates marks, and a quick-reference FAQ. Use it alongside our free mock tests for maximum impact.

What Are CAIIB BFM Recollected Questions?

Recollected questions. Also called memory-recalled questions. Are questions that students remember after writing an exam. Share with the community. They are not official IIBF releases.

For CAIIB Bank Financial Management. These recollected questions are gold for one simple reason: BFM is heavily numerical. Application-based. The same families of problems appear again and again.

So treat the questions below as practice first. Attempt each one honestly before you look at the answers. That tells you exactly how exam-ready you are right now.

Why BFM Recollected Questions Are So Effective

BFM rewards pattern recognition more than rote memory. Here is why these recalled numericals work:

• Repeating logic: Gap, NII and duration problems follow fixed steps. Learn the steps once.
• Time pressure practice: Solving under a clock trains you to finish calculations fast in the real exam.
• Confidence: Seeing familiar question shapes on exam day calms nerves. Saves minutes.
• Gap diagnosis: Wrong answers reveal exactly which concept (e.g.. Which items are rate-sensitive) you have not nailed.

For deeper theory behind each topic, pair this page with our structured free guides on Bank Financial Management.

Core BFM Concepts Tested in These Questions

Before the case studies, lock in the four pillars. Almost every recollected BFM numerical maps to one of these.

Note: Always confirm the current ALM bucket definitions. Volatile/core percentages on the latest official IIBF notification. As RBI guidelines are updated periodically.

BFM Case Study 1: Repricing Gap & NII Sensitivity

ABC Bank has the following re-pricing assets and liabilities (Rs. in crores):

Call Money – 600. Cash Credit Loans – 480, Cash in Hand – 500, Saving Bank – 600, FD – 600 and Current Deposit – 600.

On the basis of the above information, answer the following.

Q1. What is the adjusted gap in re-pricing assets and liabilities?

1. Rs. 100 Cr
2. Rs. 120 Cr
3. Rs. 140 Cr
4. Rs. 160 Cr

Q2. What is the change in Net Interest Income (NII) if the interest rate falls by 3% points for all assets and liabilities?

1. Rs. 2.40 Cr increase in NII
2. Rs. 3.60 Cr increase in NII
3. Rs. 2.40 Cr decrease in NII
4. Rs. 3.60 Cr decrease in NII

Q3. What is the change in NII if the interest rate increases by 3% points for all liabilities and assets?

1. Rs. 2.40 Cr increase in NII
2. Rs. 3.60 Cr increase in NII
3. Rs. 2.40 Cr decrease in NII
4. Rs. 3.60 Cr decrease in NII

Q4. What is the change in NII if the interest rate falls on call money by 1%, SB by 0.2%, Fixed Deposit by 1%, and Cash Credit by 0.6%?

1. Rs. 1.48 Cr increase in NII
2. Rs. 1.68 Cr increase in NII
3. Rs. 1.48 Cr decrease in NII
4. Rs. 1.68 Cr decrease in NII

Q5. What is the change in NII if the interest rate increases on call money by 0.5%, FD by 0.8%, SB by 0.1%, and CC by 1%?

1. Rs. 2.40 Cr increase in NII
2. Rs. 3.60 Cr increase in NII
3. Rs. 2.40 Cr decrease in NII
4. Rs. 3.60 Cr decrease in NII

How to approach it: First sort items into rate-sensitive assets. Liabilities (cash in hand is non-earning. So it is not rate-sensitive). Then apply ΔNII = Gap × rate change for uniform shifts. And weight each item by its own rate change for non-uniform shifts.

BFM Case Study 2: Duration Gap & Economic Value of Equity

Calculate the equity's economic value sensitivity when:

Net Worth = Rs. 1350.00, Rate-Sensitive Asset (RSA) = Rs. 18251.00, Rate-Sensitive Liability (RSL) = Rs. 18590.00, Weighted Modified Duration of Asset (DA) = 1.96, Weighted Modified Duration of Liability (DL) = 1.25.

Q6. What is Weight (W)?

1. 1.00
2. 1.02
3. 1.33
4. 1.66

Q7. What is the DGAP (Duration Gap)?

1. 0.33
2. 0.48
3. 0.69
4. 0.81

Q8. What is the Leverage Ratio?

1. 12.33
2. 13.22
3. 13.52
4. 13.66

Q9. What is the Modified Duration of Equity?

1. 6.33
2. 7.33
3. 8.33
4. 9.33

Q10. If there is a 200 bp change in rate, what will be the drop in Equity Value?

1. 18.66
2. 20.33
3. 22.66
4. 24.33

How to approach it: Weight (W) = RSL / RSA. The Duration Gap (DGAP) = DA − (W × DL). Modified Duration of Equity links DGAP to the leverage ratio (Assets / Equity).

A rate shock then changes equity value in proportion to that duration. Here. “DGAP” means Duration Gap.

Not the GST term “Directorate General of Anti-Profiteering,”. Is unrelated to BFM.

BFM Case Study 3: Identifying Rate-Sensitive Items & Tier-1 Capital

International Bank has the following assets. Liabilities on its balance sheet as on March 31. 2020 (Rs. in crores):

Capital — 4000.00. Reserves — 24000.00. Current accounts — 120000.00.

Saving Bank accounts — 120000.00. Term deposits — 120000.00. Borrowing from RBI — 12000.00.

Cash balances — 27600.00. Balances with other banks — 60000.00. Investment in securities — 60000.00, bills payable — 80000.00, cash credit — 80000.00, term loans — 80000.00 and fixed assets — 12400.00.

Total assets and total liabilities = Rs. 400000.00 cr.

Term loans have fixed interest rates. Based on this information, answer the following.

Q11. What is the amount of assets that are interest rate sensitive?

1. Rs. 252000.00
2. Rs. 320000.00
3. Rs. 360000.00
4. Rs. 400000.00

Q12. What is the amount of liabilities that are interest rate sensitive?

1. Rs. 252000.00
2. Rs. 320000.00
3. Rs. 360000.00
4. Rs. 400000.00

Q13. How much and what type of gap in rate-sensitive assets and liabilities does the bank have?

1. Rs. 108000.00 cr, Negative gap
2. Rs. 108000.00 cr, Positive gap
3. Rs. 120000.00 cr, Negative gap
4. The information given is inadequate

Q14. What is the amount of Tier-1 capital of the bank?

1. Rs. 4000.00 cr
2. Rs. 24000.00 cr
3. Rs. 28000.00 cr
4. The information given is inadequate

How to approach it: Exclude non-earning and fixed-rate items (cash. Fixed assets, fixed-rate term loans) when counting rate-sensitive amounts. For Tier-1 capital.

Think core capital. Broadly capital plus reserves. But always cross-check the exact composition on the latest RBI/Basel guidance.

BFM Case Study 4: ALM Time-Bucket Classification

As per RBI guidelines on Asset Liability Management. Capital and reserves are placed in the over-5-years bucket. Saving and Current Deposits are split into volatile and core portions.

Saving bank (10%) and Current (15%) deposits are generally withdrawable on demand. This portion is treated as volatile and placed in the 14-day bucket. While the core portion goes into the 1–3 year bucket.

Term deposits go into their respective maturity buckets.

Capital = 1180 Cr. Reserve = 12000 Cr. Current account = 1000 Cr.

Saving Bank = 4000 Cr. Borrowing from RBI = 400 Cr. Term Deposits 1-month bucket = 400 Cr.

Term deposit 1–6 months bucket = 800 Cr. Term deposit 3–6 months bucket = 1200 Cr. Term Deposit 6–12 months bucket = 2000 Cr.

Term Deposit 1–3 years bucket = 1200 Cr. Term deposit 3–5 years bucket = 600 Cr, Term deposit > 5 years bucket = 800 Cr.

Q15. What amount of Current account deposit can be placed in the 14-day bucket?

1. Rs. 100 Cr
2. Rs. 150 Cr
3. Rs. 200 Cr
4. Rs. 250 Cr

Q16. What amount of savings bank deposit can be placed in the 14-day bucket?

1. Rs. 100 Cr
2. Rs. 200 Cr
3. Rs. 400 Cr
4. Rs. 800 Cr

Q17. What amount of Current account deposit can be placed in the 1–3 year bucket?

1. Rs. 100 Cr
2. Rs. 400 Cr
3. Rs. 800 Cr
4. Rs. 850 Cr

Q18. What amount of savings bank deposit can be placed in the 1–3 year bucket?

1. Rs. 4000 Cr
2. Rs. 3600 Cr
3. Rs. 3200 Cr
4. Rs. 3000 Cr

Q19. What amount of term deposit will be placed in maturity buckets up to less than 12 months?

1. Rs. 2400 Cr
2. Rs. 2800 Cr
3. Rs. 3200 Cr
4. Rs. 4400 Cr

How to approach it: Apply the given volatile percentages (10% SB. 15% Current) to the 14-day bucket. Push the remaining core balances to 1–3 years. And simply add up the term-deposit buckets that fall below 12 months. Confirm the exact percentages on the latest official IIBF notification before the exam.

Answer Key (BFM Recollected Questions)

Solve these exactly as they appeared in previous CAIIB exams. Then reinforce each topic with the brief Bank Financial Management notes and full-length mock tests prepared by Learning Sessions.

How to Study BFM Recollected Questions the Smart Way

Reading answers is not studying. Follow this proven 5-step routine to convert recollected questions into real marks.

1. Attempt blind: Solve each case study with a timer. Without looking at options first.
2. Check and classify: For every mistake. Label the cause — concept gap, formula slip, or calculation error.
3. Re-derive the formula: Write the formula (Gap. ΔNII, DGAP) from memory until it is automatic.
4. Redo after 48 hours: Spaced repetition locks the pattern into long-term memory.
5. Simulate the exam: Take a full mock test so calculation speed becomes second nature.

Common Mistakes in BFM Numericals (and How to Avoid Them)

These errors quietly drain marks in the BFM paper. Watch for every one of them.

• Counting non-sensitive items: Cash in hand. Fixed assets and fixed-rate term loans are not rate-sensitive. Leaving them in inflates your gap.
• Confusing direction of NII change: With a positive gap. A rate rise increases NII; a rate fall decreases it. Map the sign carefully.
• Mixing up W: Weight (W) is RSL / RSA. Inverting it wrecks the duration gap answer.
• Ignoring basis points: 200 bp equals 2%, not 200%. Convert before you multiply.
• Wrong bucket split: Apply the volatile percentage only to the on-demand portion. The rest is core.
• Skipping units: Keep everything in crores consistently so your final figure is clean.

Frequently Asked Questions (FAQ)

Are CAIIB BFM recollected questions enough to clear the exam?

They are a powerful supplement, not a replacement. Use recollected questions to drill patterns and test speed. But combine them with the full syllabus. Concept notes and mock tests for complete coverage.

Is the CAIIB BFM paper mostly numerical?

BFM carries a strong numerical and case-study weight. Especially around ALM, risk management and treasury. That is why practising memory-based numericals like these pays off so well. Confirm the exact pattern and weightage on the latest official IIBF notification.

What is the difference between repricing gap and duration gap?

Repricing gap (RSA − RSL) measures the short-term impact of rate changes on Net Interest Income. Duration gap measures the impact on the economic value of equity over the longer term. The exam tests both.

How many times can I attempt these questions?

As many times as you like. Re-solving after a gap of a day or two is one of the most effective ways to make the BFM pattern permanent. Aim to solve each case study cleanly without notes.

Is there negative marking in the CAIIB BFM exam?

The marking scheme can change across cycles. So do not rely on memory. Always check the current marks. Passing criteria. Negative-marking rules on the latest official IIBF notification before your exam.

Conclusion: Turn Practice Into a Pass

The candidates who clear CAIIB BFM are rarely the ones who studied the most theory. They are the ones who practised the right patterns until the numericals felt easy.

These recollected questions hand you those exact patterns. Solve them, learn from every error, and rehearse under time pressure. Do that consistently. And the BFM paper stops being a hurdle. Becomes a scoring opportunity.

You are stronger and steadier than any tough paper. Start practising today, back it up with full-length mock tests, and walk into the exam hall with quiet confidence. You've got this.

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