CAIIB RISK MNG LIVE Class 1 By Ashish Sir · One-liners

1 What is the primary objective of Risk Management in banking as per RBI guidelines?

The primary objective is to identify, measure, monitor, and control risks to protect the bank's capital and earnings while enabling it to take informed business decisions.

2 What is the difference between risk management and risk avoidance in banking?

Risk management mitigates risk; avoidance eliminates risk-taking entirely.

बैंकिंग में जोखिम प्रबंधन और जोखिम परिहार में क्या अंतर है? — जोखिम प्रबंधन जोखिम को कम करता है; परिहार जोखिम लेने को पूरी तरह समाप्त करता है।

3 Which three pillars form the foundation of the Basel II framework?

The three pillars are Minimum Capital Requirements (Pillar 1), Supervisory Review Process (Pillar 2), and Market Discipline through disclosure (Pillar 3).

4 What is Residual Risk in the context of bank risk management?

Risk remaining after controls and mitigants have been applied.

बैंक जोखिम प्रबंधन में अवशिष्ट जोखिम क्या है? — नियंत्रण और शमन उपाय लागू करने के बाद शेष जोखिम।

5 What is the difference between expected loss and unexpected loss in credit risk?

Expected Loss (EL) is the average loss anticipated over a period and is covered by loan loss provisions, while Unexpected Loss (UL) is the deviation from EL and must be covered by economic capital.

6 What is the purpose of a Risk Register in operational risk management?

It documents identified risks, controls, owners, and mitigation plans.

परिचालन जोखिम प्रबंधन में जोखिम रजिस्टर का क्या उद्देश्य है? — यह पहचाने गए जोखिम, नियंत्रण, मालिक और शमन योजनाओं को दर्ज करता है।

7 How is Credit Risk defined in the context of banking operations?

Credit risk is the risk of loss arising from a borrower's failure to repay a loan or meet contractual obligations, including both default risk and downgrade risk.

8 What does RAROC stand for and what does it measure?

Risk-Adjusted Return on Capital; measures profitability relative to risk taken.

RAROC का क्या अर्थ है और यह क्या मापता है? — जोखिम-समायोजित पूंजी पर प्रतिफल; लिए गए जोखिम के सापेक्ष लाभप्रदता मापता है।

9 What does the term 'Risk Appetite' mean for a bank?

Risk appetite is the maximum level of risk a bank is willing to accept in pursuit of its strategic objectives, formally approved by the Board and documented in the Risk Appetite Statement.

10 What is the minimum Capital to Risk-Weighted Assets Ratio (CRAR) prescribed under Basel III?

Minimum CRAR is 10.5% including Capital Conservation Buffer.

बेसल III के तहत न्यूनतम पूंजी से जोखिम-भारित संपत्ति अनुपात (CRAR) क्या है? — पूंजी संरक्षण बफर सहित न्यूनतम CRAR 10.5% है।

11 What is Value at Risk (VaR) and how is it used by banks?

VaR is a statistical measure that estimates the maximum potential loss over a specified time horizon at a given confidence level (e.g., 99%), and is used to quantify market risk in trading portfolios.

12 What is model risk in banking and how does it arise?

Risk of loss from using incorrect or misapplied financial models.

बैंकिंग में मॉडल जोखिम क्या है और यह कैसे उत्पन्न होता है? — गलत या अनुचित रूप से लागू वित्तीय मॉडल के उपयोग से हानि का जोखिम।

13 What is the role of the Asset Liability Management Committee (ALCO) in a bank?

ALCO is responsible for managing the structural balance sheet risks, including interest rate risk and liquidity risk, and sets strategies for the bank's funding and investment activities.

14 What is the difference between VaR and Expected Shortfall (ES)?

ES measures average loss beyond VaR threshold, capturing tail risk better.

VaR और अपेक्षित कमी (ES) में क्या अंतर है? — ES, VaR सीमा से परे औसत हानि मापता है, पूंछ जोखिम को बेहतर पकड़ता है।

15 What is Operational Risk as defined under Basel II/III?

Operational risk is the risk of loss resulting from inadequate or failed internal processes, people, and systems, or from external events, including legal risk but excluding strategic and reputational risk.

16 What is sovereign risk and why is it relevant for Indian banks?

Risk of government defaulting on obligations; relevant for SLR holdings.

संप्रभु जोखिम क्या है और यह भारतीय बैंकों के लिए क्यों प्रासंगिक है? — सरकार द्वारा दायित्वों पर चूक का जोखिम; SLR होल्डिंग्स के लिए प्रासंगिक।

17 What is the Capital Conservation Buffer (CCB) under Basel III norms?

CCB is an additional capital buffer of 2.5% of Risk-Weighted Assets (RWA) above the minimum CET1 ratio, designed to ensure banks build capital outside stress periods that can be drawn down when losses are incurred.

18 What is transfer risk in the context of cross-border lending?

Risk that borrower cannot transfer funds abroad due to regulatory restrictions.

सीमा-पार उधार के संदर्भ में स्थानांतरण जोखिम क्या है? — उधारकर्ता नियामक प्रतिबंधों के कारण विदेश में धन स्थानांतरित नहीं कर सकता।

19 What distinguishes systematic risk from unsystematic risk in finance?

Systematic risk (market risk) affects the entire market and cannot be diversified away, whereas unsystematic risk is specific to an individual asset or company and can be eliminated through portfolio diversification.

20 What is settlement risk in financial markets?

Risk that counterparty fails to deliver securities or funds at settlement.

वित्तीय बाजारों में निपटान जोखिम क्या है? — निपटान पर प्रतिपक्ष द्वारा प्रतिभूतियां या धन वितरित न करने का जोखिम।

21 What is the Probability of Default (PD) in credit risk measurement?

PD is the likelihood that a borrower will default on its debt obligations over a specified time horizon (typically one year), and is a key input in calculating expected and unexpected credit losses.

22 What is the significance of the Tier 1 and Tier 2 capital distinction under Basel norms?

Tier 1 is core capital; Tier 2 is supplementary capital with lower quality.

बेसल मानदंडों के तहत टियर 1 और टियर 2 पूंजी भेद का क्या महत्व है? — टियर 1 मूल पूंजी है; टियर 2 निम्न गुणवत्ता वाली पूरक पूंजी है।

23 What is Loss Given Default (LGD) and how is it expressed?

LGD is the proportion of the exposure that a bank loses if a borrower defaults, expressed as a percentage of the Exposure at Default (EAD), and reflects the severity of loss after recovery.

24 What is correlation risk in a diversified loan portfolio?

Risk that asset correlations increase during stress, reducing diversification benefit.

विविधीकृत ऋण पोर्टफोलियो में सहसंबंध जोखिम क्या है? — तनाव के दौरान संपत्ति सहसंबंध बढ़ता है, विविधीकरण लाभ कम होता है।

25 What is meant by Exposure at Default (EAD) in the Internal Ratings-Based approach?

EAD is the total value a bank is exposed to at the time a borrower defaults, including both drawn balances and any undrawn commitments that the borrower may utilize before defaulting.

26 What is legal risk under operational risk in banking?

Risk of loss from unenforceable contracts, litigation, or regulatory non-compliance.

बैंकिंग में परिचालन जोखिम के तहत कानूनी जोखिम क्या है? — अप्रवर्तनीय अनुबंध, मुकदमेबाजी, या नियामक गैर-अनुपालन से हानि का जोखिम।

27 What is the significance of the Net Stable Funding Ratio (NSFR) under Basel III?

NSFR requires banks to maintain sufficient stable funding to cover their long-term assets over a one-year horizon, promoting resilience against liquidity stress over an extended period.

28 What is the Basic Indicator Approach for calculating operational risk capital?

Capital charge is 15% of average annual gross income over three years.

परिचालन जोखिम पूंजी गणना के लिए बुनियादी संकेतक दृष्टिकोण क्या है? — पूंजी शुल्क तीन वर्षों में औसत वार्षिक सकल आय का 15% है।

29 What is the Liquidity Coverage Ratio (LCR) and what is its minimum requirement?

LCR requires banks to hold sufficient High-Quality Liquid Assets (HQLA) to cover total net cash outflows over a 30-day stress scenario, with a minimum requirement of 100% as mandated by RBI.

30 What is the Earnings at Risk (EaR) measure used in interest rate risk?

Potential decline in net interest income due to interest rate changes.

ब्याज दर जोखिम में उपयोग किया जाने वाला आय जोखिम (EaR) माप क्या है? — ब्याज दर परिवर्तन के कारण शुद्ध ब्याज आय में संभावित गिरावट।

31 What is Interest Rate Risk in the Banking Book (IRRBB)?

IRRBB refers to the risk of losses in the banking book due to movements in interest rates affecting the bank's net interest income and the economic value of equity.

32 What is funding liquidity risk in bank treasury operations?

Risk that bank cannot raise funds to meet obligations at reasonable cost.

बैंक ट्रेजरी परिचालन में निधि तरलता जोखिम क्या है? — बैंक उचित लागत पर दायित्वों को पूरा करने के लिए धन नहीं जुटा सकता।

33 What is the difference between repricing risk and basis risk in interest rate risk?

Repricing risk arises from timing mismatches between asset and liability maturities, while basis risk arises from imperfect correlation in interest rate changes between different market indices used for pricing assets and liabilities.

34 What is the Modified Duration measure and its relevance to interest rate risk?

It measures bond price sensitivity to 1% change in interest rates.

संशोधित अवधि माप क्या है और ब्याज दर जोखिम से इसकी प्रासंगिकता क्या है? — यह ब्याज दरों में 1% परिवर्तन पर बॉन्ड मूल्य संवेदनशीलता मापता है।

35 What is a Stress Test in the context of bank risk management?

A stress test is a simulation exercise that evaluates how a bank's financial position would respond to extreme but plausible adverse scenarios, used to assess capital adequacy and liquidity under crisis conditions.

36 What is a Credit Default Swap (CDS) and how does it hedge credit risk?

A derivative contract that transfers credit default risk from buyer to seller.

क्रेडिट डिफॉल्ट स्वैप (CDS) क्या है और यह क्रेडिट जोखिम को कैसे हेज करता है? — एक व्युत्पन्न अनुबंध जो खरीदार से विक्रेता को क्रेडिट चूक जोखिम स्थानांतरित करता है।

37 What is the purpose of an Internal Capital Adequacy Assessment Process (ICAAP)?

ICAAP is a bank's own assessment of its capital requirements relative to its risk profile, going beyond Pillar 1 minimum requirements to include risks not fully captured under the standardized approach.

38 What is the difference between a risk limit and a risk trigger in bank policy?

Limits are hard boundaries; triggers are early warning thresholds prompting review.

बैंक नीति में जोखिम सीमा और जोखिम ट्रिगर में क्या अंतर है? — सीमाएं कठोर सीमाएं हैं; ट्रिगर समीक्षा के लिए प्रारंभिक चेतावनी सीमाएं हैं।

39 What is Counterparty Credit Risk (CCR) in derivative transactions?

CCR is the risk that a counterparty in a derivative or financial contract will default before the contract's final settlement, causing a loss equal to the positive mark-to-market value at the time of default.

40 What is the role of the Chief Risk Officer (CRO) in a bank's governance structure?

CRO oversees bank-wide risk framework, reports to Board Risk Committee.

बैंक की प्रशासन संरचना में मुख्य जोखिम अधिकारी (CRO) की क्या भूमिका है? — CRO बैंक-व्यापी जोखिम ढांचे की निगरानी करता है, बोर्ड जोखिम समिति को रिपोर्ट करता है।

41 What does the term 'Risk-Weighted Assets (RWA)' mean in capital adequacy calculation?

RWA is the total of a bank's assets weighted by their respective risk coefficients as prescribed by the regulator, and forms the denominator in the Capital Adequacy Ratio (CAR) calculation.

42 What is wrong-way risk in counterparty credit risk management?

When counterparty default probability increases as exposure also increases.

प्रतिपक्ष क्रेडिट जोखिम प्रबंधन में गलत-तरफ जोखिम क्या है? — जब प्रतिपक्ष चूक की संभावना एक्सपोजर के साथ-साथ बढ़ती है।

43 What is concentration risk in a bank's credit portfolio?

Concentration risk is the risk arising from excessive exposure to a single borrower, sector, geography, or product, which can lead to large losses if that segment faces distress.

44 What is pipeline risk in the context of securitisation?

Risk that market conditions deteriorate before loans can be securitised.

प्रतिभूतिकरण के संदर्भ में पाइपलाइन जोखिम क्या है? — ऋणों के प्रतिभूतिकरण से पहले बाजार की स्थितियां खराब होने का जोखिम।

45 What is the function of the Risk Management Committee of the Board (RMCB)?

RMCB is a board-level committee that oversees the bank's overall risk governance framework, approves risk policies, reviews risk appetite, and ensures that risk management practices align with strategic objectives.

46 What is the significance of the Leverage Ratio requirement under Basel III?

Minimum 3% Tier 1 leverage ratio prevents excessive on- and off-balance sheet leverage.

बेसल III के तहत उत्तोलन अनुपात आवश्यकता का क्या महत्व है? — न्यूनतम 3% टियर 1 उत्तोलन अनुपात अत्यधिक तुलन पत्र उत्तोलन को रोकता है।

47 What is reputational risk and why is it difficult to quantify?

Reputational risk is the risk of loss arising from negative public perception or damage to a bank's image, and it is difficult to quantify because it manifests indirectly through reduced business, customer attrition, and regulatory scrutiny.

48 What is strategic risk in banking and how is it different from operational risk?

Strategic risk arises from poor business decisions; operational risk from failed processes.

बैंकिंग में रणनीतिक जोखिम क्या है और यह परिचालन जोखिम से कैसे अलग है? — रणनीतिक जोखिम खराब व्यावसायिक निर्णयों से; परिचालन जोखिम विफल प्रक्रियाओं से उत्पन्न होता है।

49 What is the Standardised Approach for measuring credit risk under Basel framework?

Under the Standardised Approach, banks assign risk weights to exposures based on external credit ratings provided by RBI-approved External Credit Assessment Institutions (ECAIs), without using internal models.

50 What is the difference between inherent risk and control risk in audit terminology?

Inherent risk exists naturally; control risk arises from inadequate internal controls.

ऑडिट शब्दावली में अंतर्निहित जोखिम और नियंत्रण जोखिम में क्या अंतर है? — अंतर्निहित जोखिम स्वाभाविक रूप से मौजूद है; नियंत्रण जोखिम अपर्याप्त आंतरिक नियंत्रणों से उत्पन्न होता है।

51 What is meant by Market Risk in a bank's trading book?

Market risk is the risk of losses in on- and off-balance-sheet positions arising from movements in market prices, including interest rates, equity prices, foreign exchange rates, and commodity prices.

52 What is the Internal Ratings-Based (IRB) approach for credit risk measurement?

Banks use their own estimates of PD, LGD, EAD to calculate capital requirements.

क्रेडिट जोखिम माप के लिए आंतरिक रेटिंग-आधारित (IRB) दृष्टिकोण क्या है? — बैंक पूंजी आवश्यकताओं की गणना के लिए PD, LGD, EAD के अपने अनुमानों का उपयोग करते हैं।

53 What is the purpose of the Supervisory Review and Evaluation Process (SREP) under Basel II Pillar 2?

SREP is the process by which the regulator reviews a bank's ICAAP to assess whether the bank's capital adequacy and risk management processes are appropriate, and may impose additional capital requirements if deficiencies are found.

54 What is a bank's trading book versus banking book distinction for risk purposes?

Trading book holds positions for short-term profit; banking book holds assets till maturity.

जोखिम उद्देश्यों के लिए बैंक के ट्रेडिंग बुक और बैंकिंग बुक भेद क्या है? — ट्रेडिंग बुक अल्पकालिक लाभ के लिए पोजीशन रखती है; बैंकिंग बुक परिपक्वता तक संपत्ति रखती है।

55 What is a Key Risk Indicator (KRI) in operational risk management?

A KRI is a metric used to monitor the exposure and likelihood of operational risk events, providing early warning signals that allow management to take corrective action before losses materialize.

56 What is a risk matrix and how is it used in risk assessment?

Tool mapping risk likelihood against impact to prioritize risk responses.

जोखिम मैट्रिक्स क्या है और जोखिम मूल्यांकन में इसका उपयोग कैसे किया जाता है? — जोखिम प्रतिक्रियाओं को प्राथमिकता देने के लिए जोखिम संभावना को प्रभाव से मैप करने वाला उपकरण।

57 What is the Countercyclical Capital Buffer (CCyB) and when is it activated?

CCyB is an additional capital buffer of up to 2.5% of RWA that regulators activate during periods of excessive credit growth to ensure banks build up capital that can absorb losses during a downturn.

58 What is the difference between quantitative and qualitative risk assessment methods?

Quantitative uses numbers and models; qualitative uses expert judgment and ratings.

मात्रात्मक और गुणात्मक जोखिम मूल्यांकन विधियों में क्या अंतर है? — मात्रात्मक संख्याएं और मॉडल उपयोग करता है; गुणात्मक विशेषज्ञ निर्णय और रेटिंग उपयोग करता है।

59 What is the three lines of defence model in risk governance?

The first line (business units) owns and manages risk; the second line (risk management and compliance functions) provides oversight and frameworks; and the third line (internal audit) provides independent assurance on the effectiveness of the first two lines.

60 What is cyber risk in banking and why is it a growing concern?

Risk of financial loss from digital attacks on bank systems and data.

बैंकिंग में साइबर जोखिम क्या है और यह बढ़ती चिंता क्यों है? — बैंक प्रणालियों और डेटा पर डिजिटल हमलों से वित्तीय हानि का जोखिम।

61 What is the difference between credit risk mitigation and credit risk transfer?

Mitigation reduces risk through collateral; transfer shifts risk to another party.

क्रेडिट जोखिम शमन और क्रेडिट जोखिम स्थानांतरण में क्या अंतर है? — शमन संपार्श्विक के माध्यम से जोखिम कम करता है; स्थानांतरण जोखिम को दूसरे पक्ष को स्थानांतरित करता है।

62 What is climate risk and how is RBI integrating it into bank supervision?

Financial risks from climate change; RBI is issuing guidance for disclosure and stress testing.

जलवायु जोखिम क्या है और RBI इसे बैंक पर्यवेक्षण में कैसे एकीकृत कर रहा है? — जलवायु परिवर्तन से वित्तीय जोखिम; RBI प्रकटीकरण और तनाव परीक्षण के लिए मार्गदर्शन जारी कर रहा है।

63 What is the role of scenario analysis in bank risk management?

It evaluates potential impact of hypothetical adverse events on bank portfolio.

बैंक जोखिम प्रबंधन में परिदृश्य विश्लेषण की क्या भूमिका है? — यह बैंक पोर्टफोलियो पर काल्पनिक प्रतिकूल घटनाओं के संभावित प्रभाव का मूल्यांकन करता है।

64 What is the risk governance framework and who owns ultimate risk oversight?

Structured policies and processes; Board of Directors owns ultimate risk oversight.

जोखिम प्रशासन ढांचा क्या है और अंतिम जोखिम निगरानी का स्वामित्व किसके पास है? — संरचित नीतियां और प्रक्रियाएं; निदेशक मंडल के पास अंतिम जोखिम निगरानी का स्वामित्व है।

65 What is the difference between risk tolerance and risk capacity in banking?

Tolerance is desired risk level; capacity is maximum risk bank can absorb.

बैंकिंग में जोखिम सहनशीलता और जोखिम क्षमता में क्या अंतर है? — सहनशीलता वांछित जोखिम स्तर है; क्षमता अधिकतम जोखिम है जो बैंक सहन कर सकता है।

66 What is the significance of Pillar 3 disclosure requirements under Basel framework?

Ensures market discipline through mandatory public disclosure of risk and capital information.

बेसल ढांचे के तहत स्तंभ 3 प्रकटीकरण आवश्यकताओं का क्या महत्व है? — जोखिम और पूंजी जानकारी के अनिवार्य सार्वजनिक प्रकटीकरण के माध्यम से बाजार अनुशासन सुनिश्चित करता है।

One-linersCAIIB RISK MNG LIVE Class 1 By Ashish Sir