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WorksheetsBASEL NORMS
Total questions: 64
Worksheet time: 1hrs 4mins
Name
Class
Date
1.
RBI implemented the Basel-III recommendations in India, w.e.f
a)
01.01.2013
b)
31.03.2013
c)
01.04.2013
d)
30.09.2013
2.
Basel III recommendations shall be completely implemented in India by:
a)
31.03.2020
b)
31.03.2019
c)
31.03.2618
d)
31.03.2017
3.
Basel III Capital regulations were released by Basel Committee on Banking Supervision (BCBS) during Global Regulatory framework for more resilient banks and banking system
a)
40513
b)
40603
c)
40878
d)
41244
4.
Basel III capital regulations are based on 3 mutually reinforcing pillar. These pillars are 1. Minimum capital standards
2. Supervisory review of capital adequacy
3. Risk management
a)
all the 3 are correct,
b)
only 1 and 2 are correct,
c)
only 1 and 3 are correct,
d)
only 2 and 3 are correct Under Basel II,
5.
Under Basel II the option available to compute capital for credit risk are:-
a)
The standardized approach
b)
Risk management approach
c)
advance measurement approach
d)
Basic Indicator Approach
6.
Under Basel III, the options available to compute capital for operational risk are
a)
standardized approach
b)
risk management approach,
c)
advance measurement, approach
d)
Basic Indicator Approach
7.
Under Basel III, the options available to compute capital for market risk are :
a)
standardized approach,
b)
risk management approach,
c)
Standard Duration Approach
d)
basic indicator approach
8.
Certain specific prescription of Basel II capital adequacy framework will continue to apply along with Basel III (parallel run), till:
a)
31.03.2019
b)
31.03.2018
c)
31.03.2017
d)
31.03.2016
9.
A bank in India has to comply with capital adequacy ratio requirements at :(1) consolidated (group) level after consolidating the assets liabilities of its subsidiaries / joint ventures (2) solo level (3) overseas operations of the bank under (I) and (2).
a)
1 and 2 only correct
b)
1 and 3 only correct
c)
2 and 3 only correct
d)
1 to 3 all correct
10.
In India, the banks are required to maintain a minimum Pillar 1 capital to risk weighted assets ratio (or minimum total capital to risk weighted assets ratio) of………… a s o n ……………
a)
8%, 31' Mar each year
b)
9%, 31" Mar each year
c)
8%, ongoing basis
d)
9%, ongoing basis.
11.
The banks in India are required to compute Basel III capital ratios in the following manner (1) Common equity Tier I capital ratio (2) Tier I capital ratio (3) Tier 2 capital ratio (4) Total capital to risk weighted asset ratio
a)
1to 4 all
b)
1,2 and 4 only
c)
1, 3 and 4 only
d)
1 and 4 only
12.
To calculate capital adequacy ratio, the banks are to take into account, which of the following risk:
a)
credit risk and operational risk only
b)
credit risk and market risk only
c)
market risk and operational risk only
d)
credit risk, market risk and operational risk
13.
Which of the following statement regarding the Total regulatory capital under Basel III is correct?
a)
total regulatory capital is sum total of Tier I capital and Tier 2 capital
b)
Tier I capital is called `going-concern' capital and Tier 2 capital is called 'gone-concern' capital
c)
Tier I capital comprises common equity Tier I and additional Tier I
d)
all the above.
e)
s
14.
As per Basel III implementation in India, Common Equity Tier 1 capital must be………..% of risk weighted assets on ongoing basis:
a)
0.055
b)
0.07
c)
0.09
d)
0.11
15.
As per Basel III implementation in India, minimum Tier 1 capital must be % of risk weighted assets on ongoing basis:
a)
0.055
b)
0.07
c)
0.09
d)
0.11
16.
As per Basel III implementation in India, within the minimum Tier 1 capital, the additional Tier capital can be:
a)
min 5.5% of risk weighted assets (RWA)
b)
max 5.5% of RWA
c)
min 1.5% of RWA
d)
max 1.5% of RWA
17.
As per Base lII implementation in India, within total capital of 9% of risk weighted assets, the Tier 2 capital can be
a)
max equal to Tier I capital
b)
min equal to Tier I capital
c)
max equal to 2% of risk weighted assets
d)
min equal to 2% of risk weighted assets
18.
Which of the following statements is not correct regarding Basel III implementation in India:
a)
minimum common equity Tier I ratio should be 5.5% of RWAs
b)
(CCB) consisting of common equity, should be 2.5% of RWAs
c)
Maximum additional tier 1 capital should be 1.5% of RWAs,
d)
minimum common equity Tier I ratio plus capital conservation buffer should be 7%
19.
Which of the following statements is not correct regarding Basel III implementation in India:
a)
Maximum Tier I capital ratio should be 7%
b)
Tier 2 capital should be max 2%
c)
minimum total capital ratio should be 9%
d)
minimum total capital ratio plus capital conservation buffer should be 11.5%
20.
As per Basel III, which of the following is an element of Common Equity component of Tier I (1) common shares i.e. paid up equity capital (2) stock surplus i.e. share premium (3) statutory reserves (4) capital reserves representing surplus arising out of sale proceeds of assets (5) balance in profit and loss account at the end of the previous year.
a)
I to 4 only
b)
1 to 5 all
c)
1,4 and 5 only,
d)
1, 2 and 3 only
21.
As per Basel III, which of the following can be included in Additional Tier I capital (1) Perpetual Noncumulative Preference shares — PNCPS (2) stock surplus or share premium resulting from issue of Additional Tier I instruments (3) Debit capital instruments eligible to be included in additional Tier I.
a)
2 and 3 only
b)
1 and 2 only
c)
1 and 3 only
d)
1 to 3 all
22.
As per Basel III, Tier 2 capital comprises which of the following (1) general provisions and loss reserves (2) debt capital instruments issued by bank (3) preference share capital instruments with redeemable or cumulative feature (4) revaluation reserve (5) stock surplus i.e. share premium resulting from issue of Tier 2 eligible instruments.
a)
1 to 5 all
b)
1 to 4 only
c)
1, 4 and 5 only
d)
1, 2 and 3 only.
23.
As per Basel III, general provisions and loss reserves are included in Tier-2 capital maximum to the extent of:
a)
0.6% of total risk credit weighted assets under standardized approach and 0.6% of total risk weighted assets under IRB approach
b)
1.25% of total credit risk weighted assets under standardized approach and 0.6% of total credit risk weighted assets under IRB approach
c)
0.6% of total credit risk weighted assets under standardized approach and 1.25% of total risk weighted assets under IRB approach
d)
1.25% of total credit risk weighted assets under standardized approach and 1.25% of total risk weighted assets under IRB approach.
24.
As per Basel III, the value of revaluation reserve is to be taken --- % discount to include in Tier 2 capital:-
a)
0.6
b)
55%,
c)
0.5
d)
0.45
25.
As per Basel III, adjustments / deductions are required to be made from Tier I and Tier 2 capital, relating to which of the following
(1) goodwill and other intangible assets (2) deferred tax assets (3) Investment in own shares (treasury stock) (4) investment in capital of banking, financial or insurance entities :
a)
1 to 4 all,
b)
1 and 2 only,
c)
1 and 3 only,
d)
1 only
26.
As per Basel III, the investment of a bank in the capital of a banking or financial or insurance entity is restricted to which of the following:
a)
10% of capital funds (after deductions) of the investing bank,
b)
5% of the investee bank's equity capital,
c)
30% of paid up capital and reserves of the bank or 30%, of paid up capital of the company, whichever is lower.
d)
all the above
27.
Piller 3 of the three mutually reinforcing pillars on which Basel II is based is:
a)
Supervisory Review Process
b)
Market Discipline
c)
Minimum Capital Requirement
d)
None of the above
28.
Pillar 1 of the three mutually reinforcing pillars on which Basel II is based is:
a)
Supervisory Review Process
b)
Market Discipline
c)
Minimum Capital Requirement
d)
None of the above
29.
Pillar 2 of the three mutually reinforcing pillars on which Basel II is based is:
a)
Supervisory Review Process
b)
Market Discipline
c)
Minimum Capital Requirement
d)
None of the above
30.
Operational Risk is the risk of losses:
a)
In on-balance sheet and off-balance sheet positions arising from movement of market prices
b)
Resulting from inadequate or failed internal processes, people and systems or from external events
c)
Both the above
d)
None of the above
31.
The method/s for calculating capital charge for operational risk is/are:
a)
The Standardised approach
b)
Basic Indicator approach
c)
Advanced measurement approach
d)
All the above
32.
RWA stands for
a)
Risk Weighted Account
b)
Risk Welfare Assessment
c)
Risk Welfare Asset
d)
Risk Weighted Asset
33.
Basel I addressed only
a)
Credit Risk
b)
Market Risk
c)
Operational Risk
d)
Credit risk & Market risk
34.
Exposure at Default is the
a)
Likelihood that a borrower would default over a given time horizon, usually a year
b)
Amount the borrowers owns to the bank at the time of default
c)
Loss on a credit facility that takes place when a borrower defaults
d)
None of the above
35.
BCBS stands for;
a)
Basel Committee for Banking Standard
b)
Basel Committee for Board Standard
c)
Basel Committee for Banking Supervision
d)
Basel Committee for Board Supervision
36.
Risk resulting from external events is part of :
a)
Operational Risk
b)
Market Risk
c)
Credit Risk
d)
All of the above
37.
Supervisory Review Process (SRP) is:
a)
To ensure that bank have adequate capital to support all the risk in their business
b)
To encourage the banks to develop and use better risk management techniques
c)
Both the above
d)
None of the above
38.
BCBS aims at encouraging common approaches and standards, however does not issue binding regulations, which is left to the………………
a)
Individual Banks
b)
Individual Country Regulator
c)
World Bank
d)
IMF
39.
Initially when did G-10 countries form the Basel Committee on Banking Supervision (BCBS).
a)
1974
b)
1975
c)
1988
d)
1996
40.
As per 1988 Basel accord bank assets were classified in which of the following five buckets i.e. grouped under five categories according to credit risk carrying risk weight (%).
a)
0,25,50,75 and 100
b)
5,10,20,30 and 100
c)
0,10,20,50 and 100
d)
5,25,50,75 and 100
41.
As per Basel I, generally Government debt was assigned Risk Weight of:
a)
0.5
b)
0.2
c)
0.1
d)
0
42.
As per Basel I, Bank debt was assigned Risk Weight of:
a)
0.5
b)
0.2
c)
0.1
d)
0
43.
As per Basel I, Tier I or Core Capital includes:
a)
Capital
b)
Disclosed Reserve
c)
a only
d)
Both a & b
44.
When was the amendment to the 1988 Basel accord was made to provide an explicit cushion for the market risk to which banks are exposed?
a)
1995
b)
1996
c)
1997
d)
2004
45.
Capital requirement under Basel II accord does not include which of the following risk?
a)
Operational risk
b)
Market Risk
c)
Liquidity risk
d)
None of the above
46.
Strategic and business risks are included in which of the followings?
a)
Market Risk
b)
Supervisory Review Process
c)
Market Discipline
d)
None of the above
47.
Capital requirement under Basel II accord include which of the following risk?
a)
Operational risk
b)
Market Risk
c)
Credit risk
d)
All of the above
48.
Which of the following is prescribed under Supervisory Review Process in Pillar II of Basel II?
a)
Risk assessment
b)
Ensure minimum capital with PCA for shortfall
c)
Prescribe differential capital, where necessary
d)
All of the above
49.
Basel –I accord and the 1996 amendment thereto has defined capital requirement as:
a)
Capital = Capital Ratio (8%) x (Credit Risk+ Market Risk)
b)
Capital = Capital Ratio (5%) x (Credit Risk+ Market Risk)
c)
Capital = Capital Ratio (9%) x (Credit Risk+ Market Risk)
d)
None of the above
50.
Which was the immediate cause which prompted G-10 countries to form the Basel Committee on Banking Supervision(BCBS).
a)
Baring Bank debacle
b)
Herstatt Incident
c)
Deregulation & Globalisation
d)
None of the above
51.
The risk weights for which of the followings are differentiated based on external credit assessment under Standardised approach for Credit risk.
a)
Sovereign
b)
Inter-bank
c)
Corporate
d)
All of the above
52.
The exposure to retail and SME sector attracts a uniform risk weight of ………% irrespective of the individual risk rating of the component exposure.
a)
50
b)
75
c)
100
d)
None of the above
53.
Which of the following is Credit risk mitigant that can be used by banks under Standardised approach for capital reduction?
a)
Collateral and risk aversions
b)
Gurantees and risk identification
c)
Collateral, Guarantees, credit derivatives
d)
Credit derivatives only
54.
Capital charge computation is a function of which of the following parameters under IRB approach?
a)
Probability of Default
b)
Exposure at Default (EAD) &Loss Given Default(LGD)
c)
Maturity
d)
All the above
55.
Credit risk arises in bank in which of the following type of lending (a) Fund- based facilities (b) Non-fund based facilities (c) Treasury products
a)
a & b only
b)
a & c only
c)
b & c only
d)
a, b, c all
56.
How many principles have been laid down by “Sound Practices for the Management of Operational Risk”
a)
5
b)
10
c)
15
d)
17
57.
In the Standardised approach for operational risk, bank’s activities are divided in how many business lines?
a)
5
b)
8
c)
10
d)
12
58.
Which of the following business line is in bank’s activities in the Standardized approach ?
a)
Payment and Settlement
b)
Asset Management
c)
Retail Brokerage
d)
All the above
59.
Bank using the Basic indicator approach must hold capital for operational risk:
a)
Equal to the average over the previous three years a fixed percentage (15%) of positive annual gross income
b)
Equal to the average over the previous two years a fixed 20% annual gross income
c)
Equal to the average over the previous three years a fixed percentage (10%) of positive annual gross income
d)
None of the above
60.
Which of the following is a domestic external credit rating agency (approved by RBI) for the purpose of CRAR under Basel III implementation in India
a)
Fitch
b)
Moody’s
c)
Standard & Poor’s
d)
Infomerics
61.
. ……… Days Liquidity Coverage Ratio (LCR) is intended to promote short term resilience to potential liquidity disruption.
a)
50
b)
60
c)
30
d)
90
62.
What is the Capital Conservation Buffer under Basel III?
a)
0.025
b)
0.015
c)
0 to 2%
d)
0.035
63.
Under Basel guideline the weighing factor for cash asset is……
a)
0
b)
0.05
c)
0.1
d)
1
64.
Which one of the following is not a feature of Basel III
a)
Better capital quality
b)
Capital conservation buffer
c)
Better customer service
d)
Countercyclical buffer
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