[Part 3]: BASEL questions for RBI Grade B

Dear aspirants,
We are presenting you the BASEL questions for RBI Grade B under Finance and Management Section of the exam. BASEL guidelines are very important for RBI Grade B exam as these guidelines have direct implications on financial sector of the economy. It determines the resilience of the banking sector an economy.

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BASEL questions for RBI Grade B

  1. What is the minimum total capital required as per BASEL-III guidelines?
    1. 8% of risk weighted assets (RWA)
    2. 9% of risk weighted assets (RWA)
    3. 10% of risk weighted assets (RWA)
    4. 50% of risk weighted assets (RWA)
  2. What per cent of risk weighted assets is required as capital conservation buffer according to BASEL-III guidelines?
    1. 5%
    2. 2%
    3. 5%
    4. 3%
  3. Which of the following is/are correct regarding Capital Conservation Buffer?
    a) It is required when there is excess growth in bank’s credit portfolio
    b) It is 2.5 per cent of Risk Weighted Assets (RWA)
    c) It is required to be maintained over and above the minimum regulatory capital
    d) It intends to ensure that banks are able to absorb losses even in economic distress
    Select the correct answer from following options:

    1. Only a and b
    2. Only b, c and d
    3. Only a, c and d
    4. All are correct
  4. BASEL-III introduced ________ to cover short-term liquidity stress in banks?
    1. Net Stable Funding Ratio (NSFR)
    2. Capital conservation buffer
    3. Countercyclic buffer
    4. Liquidity Coverage Ratio (LCR)
  5. Under BASEL-III accord, for how many day horizon the banks are be required to maintain sufficient high-quality unencumbered liquid assets under Liquidity Coverage Ratio (LCR)?
    1. 30-day
    2. 60-day
    3. 75-day
    4. 90-day
  6. BASEL-III introduced ________ to mitigate liquidity mismatches in banks?
    1. Net Stable Funding Ratio (NSFR)
    2. Capital conservation buffer
    3. Countercyclic buffer
    4. Liquidity Coverage Ratio (LCR)
  7. Which of the following is/are features of BASEL-III accord?
    a) Liquidity Coverage Ratio measures adequate level of unencumbered, high-quality assets required by banks to cover short term liquidity stress.
    b) Liquidity Coverage Ratio needs to maintained over 30-day horizon
    c) To mitigate liquidity mismatches in the longer term, banks are mandated to maintain a net stable funding ratio (NSFR)
    d) Net stable funding ratio (NSFR) cannot be lower than 100%
    Select the correct answer from following options:

    1. Only a and b
    2. Only c and d
    3. Only a, b and d
    4. All are correct
  8. What is minimum Common Equity Tier 1 capital required by banks as per BASEL-III guidelines?
    1. 3.5%
    2. 4%
    3. 4.5%
    4. 5.5%
  9. What is minimum total Tier 1 capital required by banks as per BASEL-III guidelines?
    1. 3%
    2. 4%
    3. 5%
    4. 6%
  10. What is minimum Total capital required by banks as per BASEL-III guidelines?
    1. 6%
    2. 7%
    3. 8%
    4. 9%

Answers

  1. 1
    According to BASEL-III guidelines, the minimum total capital stands at 8 per cent of risk weighted assets (RWA).
  2. 3
    Basel III introduced a capital conservation buffer of 2.5 per cent of Risk Weighted Assets (RWA) over and above the minimum capital requirement, raising the total capital requirement to 10.5 per cent.
  3. 2
  4. 4
    BASEL-III introduced a concept of Liquidity Coverage Ratio (LCR) which is used to cover short-term liquidity stress.
  5. 1
    Liquidity Coverage Ratio (LCR) is designed to ensure that a bank maintains an adequate level of unencumbered, high-quality assets that can be converted into cash to meet its liquidity needs for a 30-day time horizon under an acute liquidity stress scenario specified by supervisors
  6. 1
    NSFR is defined as the ratio, for a bank, of its “available amount of stable funding” divided by its “required amount of stable funding” to mitigate liquidity mismatches in the longer term.
  7. 4
  8. 3
  9. 4
  10. 3

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You may also like to read following MCQs for RBI Grade B exam: 

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