CAIIB RISK MNG LIVE Class 3 By Ashish Sir
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 66 rapid-fire Q&A cards.
What is the primary objective of Risk Management in banking as per RBI guidelines?
The primary objective is to identify, measure, monitor, and control risks to protect the bank's capital and earnings while ensuring regulatory compliance and financial stability.
What is the Basel III minimum Capital Adequacy Ratio (CAR) requirement for banks?
Minimum 8% of Risk-Weighted Assets under Basel III.
Which three broad categories of risk are most critical for banks under the Basel framework?
Credit Risk, Market Risk, and Operational Risk are the three broad categories, collectively forming the basis for Pillar 1 capital requirements under Basel III.
What is Tier 1 Capital in the context of bank capital adequacy?
Core capital including equity and retained earnings of the bank.
What is Residual Risk in the context of credit risk management?
Residual Risk is the risk that remains after applying credit risk mitigants such as collateral or guarantees, arising when those mitigants prove less effective than anticipated.
What is Tier 2 Capital and what instruments are included in it?
Supplementary capital including subordinated debt and revaluation reserves.
How does the Internal Capital Adequacy Assessment Process (ICAAP) relate to risk management?
ICAAP requires banks to assess all material risks beyond Pillar 1 and maintain adequate capital, forming a key part of Pillar 2 under the Supervisory Review Process.
What is the Minimum Equity Capital Ratio required under Basel III norms?
Banks must maintain minimum 4.5% Common Equity Tier 1 ratio.
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