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 ABC Bank has provided following details : 1- Tier 1 Capital = Rs.4500cr 2- Tier 2 Capital = Rs.4000cr. 3- Capital charge for market credit risk = Rs.2400cr 4- Capital charge for market risk = Rs.1600cr 5- Capital charge for operational risk = Rs.800cr 1) Based on the given information, please calculate the amount of total risk weighted assets, if the CAR is 8%; Total risk weighted assets = RWA for credit risk + RWA for market risk + RWA for opperational risk = 2400/0.08 + 1600/0.08 + 800/0.08 = 30000 + 20000 + 10000 = 60000 cr 2) Based on the given information, please calculate the amount of Tier 1 Capital adequacy ratio of the bank Total risk weighted assets = RWA for credit risk + RWA for market risk + RWA for opperational risk = 2400/0.08 + 1600/0.08 + 800/0.08 = 30000 + 20000 + 10000 = 60000 cr Tier 1 Capital = 4500 Tier 1 Capital adequacy ratio = Eligible Tier 1/Total RWA = 4500/60000 = 7.5% 3) Based on the given information, please calculate the amount of Tier 2 Capital adequacy ratio of the bank Total risk weighted assets = RWA for credit risk + RWA for market risk + RWA for opperational risk = 2400/0.08 + 1600/0.08 + 800/0.08 = 30000 + 20000 + 10000 = 60000 cr Tier 2 Capital = 4000 Tier 2 Capital adequacy ratio = Eligible Tier 2/Total RWA = 4000/60000 = 6.66% 4) Based on the given information, please calculate the total Capital to risk assets ratio; Total risk weighted assets = RWA for credit risk + RWA for market risk + RWA for opperational risk = 2400/0.08 + 1600/0.08 + 800/0.08 = 30000 + 20000 + 10000 = 60000 cr Tier 1 Capital = 4500 Tier 2 Capital = 4000 Total = 8500 Total Capital to risk assets ratio = Eligible total capital fund / Total RWA = 8500/60000 = 14.17% ------------------------------------------------- ABC Bank has provided following details : 1- Tier 1 Capital = Rs.2000cr 2- Tier 2 Capital = Rs.2400cr. 3- Risk weighted assets for credit risk = Rs.20000cr 4- Capital charge for market risk = Rs.1000cr 5- Capital charge for operational risk = Rs.600cr 1) Based on the given information, please calculate the amount of total risk weighted assets, if the CAR is 9%; Total risk weighted assets = RWA for credit risk + RWA for market risk + RWA for opperational risk = 20000 + 1000/0.09 + 600/0.09 = 20000 + 11112 + 6667 = 37779cr. 2) Based on the given information, please calculate the amount of Tier 1 Capital adequacy ratio of the bank Total risk weighted assets = RWA for credit risk + RWA for market risk + RWA for opperational risk = 20000 + 1000 /0.09 + 600 / 0.09 =20000 + 11112 + 6667 = 37779cr Tier 1 Capital = 2000 Tier 2 Capital = 2400 Total = 4000 (Tier 2 cannot be Tier 1) Tier 1 Capital adequacy ratio = Eligible Tier 1/Total RWA = 2000/37779 = 5.29% 3) Based on the given information, please calculate the total Capital to risk assets ratio; Total risk weighted assets = RWA for credit risk + RWA for market risk + RWA for opperational risk = 20000 + 1000 /0.09 + 600 / 0.09 =20000 + 11112 + 6667 = 37779cr Tier 1 Capital = 2000 Tier 2 Capital = 2400 Total = 4000 (Tier 2 cannot be Tier 1.Hence maximum it can be taken is 2000cr). Total Capital to risk assets ratio = Eligible total capital fund / Total RWA = 4000/37779 = 10.59% ……………………………………………………………………………………………………………………………………………

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