CAIIB · ABM

CAIIB ABM Module A & C By Ashish Sir Class 1

Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Advanced Bank Management — CAIIB.

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Q

What is the primary objective of Advanced Bank Management as a CAIIB subject?

A

ABM aims to develop in-depth understanding of risk management, credit management, treasury operations, and financial analysis skills required for senior banking professionals.

Q

What is the primary focus of Module A in CAIIB Advanced Bank Management?

A

Economic analysis, business mathematics, and statistics for banking.

Q

What does the term 'Net Interest Margin' (NIM) represent in banking?

A

NIM is the difference between interest income earned by a bank and interest paid to depositors, expressed as a percentage of average earning assets, indicating core profitability.

Q

What is the law of demand and how does it relate to banking products?

A

Higher price leads to lower quantity demanded; applies to loan pricing.

Q

How is the Capital Adequacy Ratio (CAR) calculated under Basel norms?

A

CAR = (Tier I Capital + Tier II Capital) / Risk-Weighted Assets × 100; RBI mandates a minimum CAR of 11.5% for Indian banks under Basel III.

Q

What is the concept of elasticity of demand in the context of banking services?

A

Responsiveness of demand to changes in price or income.

Q

What is the difference between Tier I and Tier II capital in the context of Basel III?

A

Tier I capital is core capital comprising paid-up equity, retained earnings, and disclosed reserves, while Tier II is supplementary capital including subordinated debt, revaluation reserves, and general provisions.

Q

What does GDP measure and why is it important for bank credit appraisal?

A

Total economic output; indicates borrower's business environment strength.

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