RETAIL ASSET PRODUCT
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Retail Banking and Wealth Management — JAIIB.
One-liners from this chapter
Free sample — 8 of 66 rapid-fire Q&A cards.
What is a retail asset product in the context of banking?
A retail asset product is a loan or credit facility extended by a bank to individual customers or small businesses, such as home loans, personal loans, auto loans, and credit cards.
What is the primary difference between retail asset products and corporate loans?
Retail loans target individuals; corporate loans target businesses.
Which regulatory body governs retail lending norms for commercial banks in India?
The Reserve Bank of India (RBI) governs retail lending norms through its Master Directions and Circulars issued under the Banking Regulation Act, 1949.
What is a home loan and what is its typical maximum repayment tenure?
A home loan funds property purchase; tenure up to 30 years.
What is the purpose of a Loan-to-Value (LTV) ratio in retail asset products?
The LTV ratio determines the maximum loan amount a bank can extend relative to the value of the collateral, thereby limiting the bank's credit risk exposure.
What is a plot loan and how does it differ from a home loan?
Plot loan finances land purchase only, not construction.
What is the maximum LTV ratio permissible for home loans above Rs. 75 lakhs as per RBI guidelines?
For home loans above Rs. 75 lakhs, RBI stipulates a maximum LTV ratio of 75%, meaning the borrower must contribute at least 25% as a down payment.
What is a gold loan and what is the maximum LTV ratio permitted by RBI?
Gold loan is secured against gold jewellery; LTV up to 75%.
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