CAIIB · BFM

Funding and regulatory aspects

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

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One-liners from this chapter

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What is the primary objective of treasury management in a bank?

The primary objective is to manage the bank's liquidity, fund mobilisation, and investment of surplus funds while optimising returns within regulatory and risk parameters.

What is the minimum Liquidity Coverage Ratio (LCR) that Indian banks must maintain?

100% of net cash outflows over 30-day stress period.

Which RBI guideline governs the Liquidity Coverage Ratio (LCR) for Indian banks?

RBI's Basel III framework guidelines, issued under the Banking Regulation Act, govern LCR requirements, mandating banks to hold High Quality Liquid Assets (HQLAs) to cover 30-day net cash outflows.

What is the minimum Net Stable Funding Ratio (NSFR) required for Indian banks under Basel III?

NSFR must be at least 100% at all times.

What is the Net Stable Funding Ratio (NSFR) and why is it important?

NSFR is a Basel III metric requiring banks to maintain a stable funding profile over a one-year horizon; it ensures that long-term assets are funded by stable liabilities, reducing maturity mismatch risk.

What is the current CRR rate prescribed by RBI for scheduled commercial banks?

CRR rate is determined periodically by RBI's Monetary Policy Committee.

What does the Cash Reserve Ratio (CRR) require Indian commercial banks to maintain?

CRR requires banks to maintain a specified percentage of their Net Demand and Time Liabilities (NDTL) as cash balances with the RBI, with no interest paid on these reserves.

What is the minimum SLR that banks are currently required to maintain in India?

Minimum SLR is 18% of Net Demand and Time Liabilities (NDTL).

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