CAIIB · CB · Chapter 11

Financial Inclusion, Consumer Protection and Ombudsman

Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Central Banking (Elective) — CAIIB.

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One-liners from this chapter

Free sample — 8 of 59 rapid-fire Q&A cards.

Q

Sec. 17(6A)?

A

Deposits with other central banks and the Bank for International Settlements (BIS)

Q

Sec. 17(12)?

A

Investment in debt instruments representing sovereign / sovereign-guaranteed liability

Q

Sec. 17(12A)?

A

Investment in debt papers with residual maturity not exceeding 10 years

Q

Sec. 17(13)?

A

Deposits with commercial banks overseas

Q

Sec. 33(6)?

A

Other instruments / institutions as approved by the Central Board of RBI

Q

Credit Risk — What it is / RBI's primary control?

A

What it is: Risk that an issuer / counterparty fails to honour its debt obligation; RBI's primary control: Stringent counterparty selection; only highly-rated sovereigns, central banks, BIS, supranationals

Q

Market Risk — What it is / RBI's primary control?

A

What it is: Change in portfolio value from movement in interest rates, FX rates, gold, equity prices; RBI's primary control: CGRA for FX / gold; IRA for security prices; benchmark duration limits

Q

Liquidity Risk — What it is / RBI's primary control?

A

What it is: Inability to sell an asset / close a position without significant cost; RBI's primary control: Holding liquid Treasury securities; monitoring convertible-at-short-notice portion

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