CAIIB · BFM

CAIIB BFME Module B & C By Ashish Sir Class 1

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

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Q

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

A

The primary objective is to identify, measure, monitor, and control risks to protect the bank's capital and earnings while ensuring regulatory compliance and long-term sustainability.

Q

What is the meaning of BFME in the context of CAIIB?

A

Bank Financial Management and Elective paper in CAIIB

Q

What are the three pillars of Basel II framework?

A

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

Q

What is Module B of CAIIB Bank Financial Management focused on?

A

Risk Management principles and practices in banking

Q

What does RAROC stand for and what does it measure?

A

RAROC stands for Risk-Adjusted Return on Capital; it measures the return generated per unit of economic capital deployed, helping compare profitability across business lines on a risk-adjusted basis.

Q

What is Module C of CAIIB Bank Financial Management focused on?

A

Treasury Management and international banking operations

Q

What is Credit Risk in the context of banking?

A

Credit risk is the risk of loss arising from a borrower or counterparty failing to meet their financial obligations as agreed, leading to default on loan repayments or other credit facilities.

Q

What does Basel III primarily aim to strengthen in banks?

A

Capital adequacy, leverage ratio, and liquidity standards

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