Risk Management Latest Syllabus Priority
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Risk Management (Elective) — CAIIB.
One-liners from this chapter
Free sample — 8 of 65 rapid-fire Q&A cards.
What is the primary objective of the Basel III framework in the context of Indian banking?
Basel III aims to strengthen bank capital requirements, improve risk management, and enhance the resilience of banks against financial shocks. RBI has implemented Basel III norms for all scheduled commercial banks in India.
What is the full form of RAROC and what does it measure?
Risk-Adjusted Return on Capital; measures profitability relative to risk taken.
What does the acronym ICAAP stand for in risk management?
ICAAP stands for Internal Capital Adequacy Assessment Process, which requires banks to assess their capital needs in relation to all material risks beyond the minimum regulatory capital requirements.
What is Exposure at Default (EAD) in credit risk modelling?
Total value a bank is exposed to at the time of borrower's default.
Under RBI guidelines, what is the minimum Common Equity Tier 1 (CET1) capital ratio required for Indian banks?
RBI mandates a minimum CET1 ratio of 5.5% of Risk-Weighted Assets (RWAs), with an additional Capital Conservation Buffer of 2.5%, making the effective minimum CET1 requirement 8%.
What is the purpose of the Supervisory Review and Evaluation Process (SREP)?
Regulators assess whether banks hold adequate capital relative to their risks.
What is Operational Risk and how is it defined under Basel norms?
Operational Risk is the risk of loss resulting from inadequate or failed internal processes, people, systems, or external events. It includes legal risk but excludes strategic and reputational risk.
What is concentration risk in the context of credit portfolio management?
Risk from excessive exposure to a single borrower, sector, or geography.
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