Practice Risk Management in Banks Questions and Answers

• What action must the Complainant take for an Award passed by the RBI Ombudsman to remain valid and legally effective?
• Suppose a customer's complaint is rejected because it is currently being formally heard and adjudicated before a state consumer disputes redressal commissi...
• If an institution fails to provide a service that it has no legal, regulatory, or contractual obligation to offer, can this failure be labeled a "deficienc...
• What structural limitation separates the power of the RBI Deputy Ombudsman from the principal RBI Ombudsman?
• A term loan asset is formally classified as a Non-Performing Asset (NPA) if the principal or interest payment remains overdue for a continuous period excee...
• For agricultural loans extended for short-duration crops, an account is classified as an NPA if the installment of principal or interest remains overdue fo...
• An asset is classified under the "Substandard" category if it has remained a Non-Performing Asset (NPA) for a period less than or equal to how many months?
• Which of the following asset categories is considered completely uncollectible and of such little value that its continuance as a bankable asset is no long...
• Special Mention Accounts (SMA) are categorized to identify early stress in loan accounts. Which sub-category denotes that the principal or interest payment...
• What type of provision is maintained by banks to show the percentage of total non-performing assets that are covered by provisions, acting as a measure of ...
• When a bank calculates its Net Non-Performing Assets (Net NPAs), which of the following variables is directly deducted from the Gross NPAs?
• The revised Prompt Corrective Action (PCA) framework is primarily a tool designed by the regulator to manage financial stability. What type of mechanism do...
• In which year was the Prompt Corrective Action (PCA) framework first introduced in India to bring structural improvements to weak banking institutions?
• Which of the following financial institutions are explicitly EXCLUDED from the scope of the revised PCA framework for commercial banks?
• Under the revised PCA framework for commercial banks, which operational metric was entirely removed as an independent trigger point or parameter for invoki...
• The revised Prompt Corrective Action (PCA) Framework for Urban Co-operative Banks (UCBs) officially replaced the older Supervisory Action Framework (SAF). ...
• Under the forward-looking ECL framework, which stage requires a bank to maintain credit loss provisions covering a 12-month horizon?
• Which asset classification under the ECL model directly corresponds to traditional credit-impaired Non-Performing Assets (NPAs)?
• What core metric represents the net percentage or economic loss a bank stands to suffer if an asset goes into default?
• What forward-looking parameter represents the statistical likelihood of a borrower defaulting on an obligation over a specific time horizon?
• When an asset is upgraded from an NPA status back to a Standard Asset, what is the regulatory requirement regarding the restoration of its classification?
• To prevent banks from utilizing overly optimistic internal statistical software to under-provision under the ECL guidelines, the regulator introduces which...
• Under the revised PCA framework for commercial banks, which three specific areas are monitored as the core financial parameters?
• In a Cash Credit account, the outstanding balance is within the sanctioned limit, but there have been no credits in the account for 90 days as on the date ...
• To prevent a severe initial shock to regulatory capital adequacy upon transitioning to ECL, banks can "add back" provisions to which capital layer?
• What is the standard regulatory provisioning requirement for a general, unsecured asset that has been explicitly identified as a "Loss Asset" but is not ye...
• What does a higher Provisioning Coverage Ratio (PCR) directly indicate about a commercial banking institution?
• When a Urban Co-operative bank breaches financial metrics and is placed under "Risk Threshold 2" of the PCA framework, what is the mandatory corrective act...
• Under the transitional rules of the Expected Credit Loss (ECL) framework starting April 1, 2027, banks are permitted to "add back" a fraction of their addi...
• In which year was the SARFAESI Act enacted by the Parliament of India?
• What is the primary objective of the SARFAESI Act, 2002?
• Which type of creditors are completely excluded from using the SARFAESI Act?
• Under SARFAESI, a bank can initiate action only after the loan account is classified as:
• What is the minimum default amount required to initiate corporate insolvency under the IBC since 2020?
• Who regulates the overall system and the licensed insolvency professionals under the IBC?
• If a borrower wants to challenge a bank's action under the SARFAESI Act, where must they file an application?
• What is the primary approach or philosophy behind the IBC?
• Within how many days must a borrower challenge the bank's enforcement action before the DRT under SARFAESI?
• Which body serves as the primary Adjudicating Authority for companies and LLPs under the IBC?
• Which of the following is completely exempted from the application of the SARFAESI Act?