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Interest Rate Risk Management
Interest Income — Description / Typical Example?
Description: Earnings from loans and advances and from investments in G-Secs, T-Bills, bonds and other interest-bearing assets.; Typical Example: Interest on a 7-year home loan at 8.50% p.a.
Fee-Based Income — Description / Typical Example?
Description: Non-interest income from services rendered without committing the balance sheet — processing fees, LC commission, BG commission, locker rent, demat charges, third-party distribution commission.; Typical Example: ₹15,000 processing fee on a ₹50 lakh car loan
Treasury / Trading Income — Description / Typical Example?
Description: Profits from proprietary trading in forex, G-Secs, derivatives and equities; also includes income from money-market operations and SLR/non-SLR trading book.; Typical Example: Trading profit on a ₹100 crore G-Sec bought at 99.20 and sold at 99.85
Interest Expenses — Description / Examples?
Description: Interest paid on deposits, borrowings, refinance, subordinated debt and tier-2 bonds. Typically the largest single cost line for a commercial bank.; Examples: Interest paid on savings, term deposits, RBI repo borrowings, IBPC borrowings
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