Net interest position of the bank has which of the

Solution

Net Interest income (NII) is the difference between the interest earned on the bank’s assets (i.e. loans and advances given by it) and interest paid by bank on the liabilities (i.e. deposits and other borrowings by banks). Positive NII will lead to higher profitability. NII position of the bank will change if either of the interest changes whle the other remains constant. For example, if interest paid on deposits increases while interest charged on loans remains fixed, the NII of the bank will reduce.