Question
ABC Bank Ltd has extended a Rs.10 crore loan at 5% over
the repo rate. The loan is to be repaid in equal quarterly instalments. The bank’s funding of the loan is to be done by 5 years deposit, interest rate on it being 6.5%. Which of the following risk associated with this transaction can lead to variation in the bank’s net interest income in one year?Solution
Repricing risk is the risk of changes in interest rate charged (earned) at the time a financial contract's rate is reset . Here the interest on the loan extended (asset) is variable while that on the deposits (liability) is fixed. Any change in the interest rate will impact the net interest income by repricing of the loan of the bank and changing the net spread between interest earned and interest paid.
Consider the statements about 'Desert Cyclone 2024':
1. It was held between India and UAE.
2. Held in Rajasthan.
3. It is the inaug...
Who was recently appointed as the Chairman & Managing Director (CMD) of BSNL?
With reference to India's satellite launch vehicles, consider the following statements:
1. PSLVs launch the satellites useful for Earth resources...
In which ocean have Indian scientists recently uncovered a 'Giant Gravity Hole'?
Which country is hosting 'Exercise Bright Star- 23'?
How many gallantry awards have been approved by the President on the occasion of the 77th Independence Day?Â
What is the theme of International Olympic Day observed on June 23, 2024?
Which edition of the multinational air exercise 'Tarang Shakti 2024' will India host from August 6th to 14th?
Match the following:
 Who recently became the first woman Chief Secretary (CS) of Maharashtra?
