Case Studies
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Accounting and Financial Management for Bankers — JAIIB.
One-liners from this chapter
Free sample — 8 of 65 rapid-fire Q&A cards.
In a case study where a bank's NPA ratio rises sharply, what is the primary regulatory benchmark for Net NPA ratio under RBI norms?
RBI expects banks to keep Net NPA below 6% of net advances; persistent breach triggers Prompt Corrective Action (PCA) framework.
In a case study on bank lending, what is the purpose of a 'Credit Risk Rating' model?
To quantify borrower's default risk and determine loan pricing.
A case study shows a bank reporting 'evergreening' of loans — what does this practice mean?
Evergreening refers to extending fresh credit or restructuring existing loans to conceal defaults, thereby artificially preventing NPA classification.
A case study shows a bank's 'Gross NPA' versus 'Net NPA' — how is Net NPA derived?
Gross NPA minus provisions held against NPAs equals Net NPA.
In a balance sheet analysis case, how is the Capital Adequacy Ratio (CAR) computed under Basel III?
CAR = (Tier 1 Capital + Tier 2 Capital) / Risk-Weighted Assets × 100; minimum required under Basel III in India is 11.5% including capital conservation buffer.
In a project appraisal case, what does a Payback Period of two years signify?
The project recovers its initial investment within two years.
A case study presents a bank with a high Current Ratio but poor Quick Ratio — what does this signal?
It signals that a large portion of current assets is tied up in slow-moving inventory, meaning the bank's borrower may face liquidity stress even if overall current assets look adequate.
A case study involves 'Accrual Basis' of accounting — how does it differ from 'Cash Basis'?
Income and expenses are recorded when earned or incurred, not when cash is received or paid.
Video classes for this chapter
ACCOUNITNG CONCEPTS BY KUNDAN SIR
ACCOUNITNG CONVENTIONS BY KUNDAN SIR
ACCOUNTING STANDARDS BY KUNDAN SIR
ASSETS OF BANKING COMPANY
BILLS OF EXCHANGE
BRANCHES OF ACCOUNTING BY KUNDAN SIR
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