CAIIB · RM

Risk Management Caiib Elective Syllabus Priority

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

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Q

What is the primary objective of Risk Management as per CAIIB elective syllabus?

A

The primary objective is to identify, assess, monitor, and control various risks faced by banks to protect capital and earnings while enabling sustainable growth.

Q

What is the Leverage Ratio under Basel III and what minimum level does RBI prescribe?

A

Tier 1 capital to total exposure ratio; minimum 3.5% for Indian banks.

Q

Which RBI guidelines govern the overall risk management framework for Indian commercial banks?

A

RBI's Master Circular on Basel III Capital Regulations and various guidelines on credit, market, and operational risk form the governing framework for Indian banks.

Q

What is the Minimum Capital Requirement (MCR) for Total Capital Adequacy under RBI's Basel III guidelines?

A

Total CRAR of at least 11.5% including capital conservation buffer.

Q

What are the three pillars of Basel III applicable to Indian banks?

A

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

Q

What does the Internal Capital Adequacy Assessment Process (ICAAP) require banks to assess?

A

Capital adequacy relative to risk profile and strategy going forward.

Q

What does ICAAP stand for and why is it significant in CAIIB risk management?

A

ICAAP stands for Internal Capital Adequacy Assessment Process; it is a Pillar 2 requirement where banks self-assess capital needs against all material risks beyond Pillar 1.

Q

What is the Supervisory Review and Evaluation Process (SREP) conducted by RBI?

A

RBI's review of banks' ICAAP and imposition of Pillar 2 add-ons.

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