Balance sheet of a bank provides the following information: Fixed Assets - 1000cr Investment in ce

Balance sheet of a bank provides the following information: Fixed Assets - 1000cr Investment in central Govt Securities - Rs 10000cr In standard loan accounts Housing Loans - Rs 6000cr (Secured, below Rs 10 lac) the Retail loan - Rs 4000cr SME Loans - Rs 5000 Cr Other loans - Rs 8000cr sub-standard secured loans - Rs 1000cr sub-standard unsecured loans - Rs 500cr Doubtful loans (D-1, secured) - Rs 800cr Doubtful loans (D-1, unsecured) - Rs 600cr Doubtful loans (D-2, secured) - Rs 500cr Doubtful loans (D-2, unsecured) - Rs 1000cr Doubtful loans (D-3, secured) - Rs 1000cr Doubtful loans (D-3, unsecured) - Rs 600cr Loss Assets - 50cr and other assets - Rs 500cr. Answer the following questions, based on this information, by using standard Approach for credit risk. 1. What is the amount of RWAs for investment in govt securities? a. Rs 5000cr b. Rs 3500cr c. Rs 2500cr d. Nil 2. What is the amount of RWAs for sub-standard secured accounts? a. Rs 500cr b. Rs 7500cr c. Rs 1000cr d. Rs 1500cr 3. What is the amount of RWAs for sub-standard unsecured accounts? a. Rs 500cr b. Rs 7500cr c. Rs 1000cr d. Rs 1500cr 4. What is the amount of RWAs for doubtful (D-1, Secured) accounts? a. Rs 300cr b. Rs 500cr c. Rs 800cr d. Rs 900cr 5. What is the amount of RWAs for doubtful (D-1, unSecured) accounts? a. Rs 300cr b. Rs 500cr c. Rs 800cr d. Rs 900cr 6. What is the amount of RWAs for doubtful (D-2, Secured) accounts? a. Rs 300cr b. Rs 500cr c. Rs 800cr d. Rs 900cr 7. What is the amount of RWAs for doubtful (D-2, unSecured) accounts? a. Rs 300cr b. Rs 500cr c. Rs 800cr d. Rs 900cr 8. What is the amount of RWAs for doubtful (D-3, Secured) accounts? a. Rs 300cr b. Rs 500cr c. Rs 800cr d. Rs 900cr 9. What is the amount of RWAs for doubtful (D-3, Secured) accounts? a. Rs 300cr b. Rs 500cr c. Rs 800cr d. Rs 900cr 10. What is the amount of RWAs for retail loans? a. 3000cr b. 4000cr c. 5000cr d. 6000cr 11. What is the amount of RWAs for SME loans? a. 3000cr b. 3750cr c. 4000cr d. 4250cr 12. What is the amount of RWAs for housing loans? a. 3000cr b. 4000cr c. 5000cr d. 6000cr Solution : 1. d RW against Govt Securities = 0 % So, RWA = 10000 x 0% = 0 Cr 2. d If the provision is less than 20 %, then RW is 150% If the provision is 20-50 %, then RW is 100% If the provision is more than 50 %, then RW is 50% Provision in Sub-Standard Secured - 15 %, and so, RW = 150 % So, RWA = 1000 x 150 % = 1500 Cr 3. a If the provision is less than 20 %, then RW is 150% If the provision is 20-49 %, then RW is 100% If the provision is 50% or more, then RW is 50% Provision in Sub-Standard Un-Secured - 25 %, and so, RW = 100 % So, RWA = 500 x 100 % = 500 Cr 4. c If the provision is less than 20 %, then RW is 150% If the provision is 20-49 %, then RW is 100% If the provision is 50% or more, then RW is 50% Provision in doubtful (D-1, Secured) - 25 %, and so, RW = 100 % So, RWA = 800 x 100 % = 800 Cr 5. a If the provision is less than 20 %, then RW is 150% If the provision is 20-49 %, then RW is 100% If the provision is 50% or more, then RW is 50% Provision in doubtful (D-1, unsecured) - 100 %, and so, RW = 50 % So, RWA = 600 x 50 % = 300 Cr 6. b If the provision is less than 20 %, then RW is 150% If the provision is 20-49 %, then RW is 100% If the provision is 50% or more, then RW is 50% Provision in doubtful (D-2, Secured) - 40 %, and so, RW = 100 % So, RWA = 500 x 100 % = 500 Cr 7. b If the provision is less than 20 %, then RW is 150% If the provision is 20-49 %, then RW is 100% If the provision is 50% or more, then RW is 50% Provision in doubtful (D-2, unsecured) - 100 %, and so, RW = 50 % So, RWA = 1000 x 50 % = 500 Cr 8. b If the provision is less than 20 %, then RW is 150% If the provision is 20-49 %, then RW is 100% If the provision is 50% or more, then RW is 50% Provision in doubtful (D-3, Secured) - 100 %, and so, RW = 50 % So, RWA = 1000 x 50 % = 500 Cr 9. a If the provision is less than 20 %, then RW is 150% If the provision is 20-49 %, then RW is 100% If the provision is 50% or more, then RW is 50% Provision in doubtful (D-3, unsecured) - 100 %, and so, RW = 50 % So, RWA = 600 x 50 % = 300 Cr 10. a RW on retail loans = 75 % So, RWA = 4000 x 75% = 3000 Cr 11. b RW on SME loans = 75 % So, RWA = 5000 x 75% = 3750 Cr 12. a RW on housing loans = 50 % So, RWA = 6000 x 50% = 3000 Cr