📝 One-liners · 65 cards
ONE LINER QUESTIONS
What is the primary objective of Asset-Liability Management (ALM) in banks?
ALM aims to manage the risk arising from mismatches between assets and liabilities in terms of maturity, interest rate, and currency, thereby protecting net interest income and economic value.
What is the primary purpose of the Statutory Liquidity Ratio (SLR) maintained by Indian banks?
To ensure banks hold liquid assets as a safety buffer.
What does the term 'Duration Gap' indicate in bank financial management?
Duration Gap measures the difference between the weighted average duration of assets and liabilities, indicating the bank's sensitivity of net worth to changes in interest rates.
What is the Cash Reserve Ratio (CRR) and where must banks maintain it?
Minimum cash deposit banks must maintain with RBI.
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