CAIIB Discussions thread July 2017

What will be sinking fund for redeeming capital of Rs. 15 lacs at the end of 25 years @ 5% compound interest? a. 275000 b. 295000 c. 315000 d. 335000 Ans - c Solution : The sinking fund factor is the amount that accumulates to Re. 1 if invested at specified rate of interest for certain number of years. It can be obtained from Valuation Tables. The factor for redemption of Re 1 at the end of 25 years @ 5% compound interest is 0.021 from the table (see Appendix). Thus the sinking fund for redeeming original capital of Rs. 15 lacs will be 15,00,000 x 0.021 = 315000.

 

Cleared CAIIB.... Thanks to Sir and all the members

 

Cleared caiib in first attempt .. ABM 53, BFM 54, Retail 59. Thanks a lot K Cbi sir.

 

I have heard ekyc but is there anything called ckyc? Rbi Naya rules Hari kiya had kya banking sector me

 

At last CAIIB cleared with ABM : 64, BFM : 52 & Retail Banking : 56

 

What will be the capitalized value of a property purchased for Rs. 8,00,000 for income @ 10% rate of interest and redemption of capital @ 5% rate of interest for a period of 25 years? a. 6161000 b. 6166000 c. 6616000 d. 6661000 Ans - c Solution : In actual practice, separate provision for sinking fund is not done but the capitalized value is obtained by referring to dual rate Valuation Tables to determine the multiplying factor (YP) based on income for a specified period (life of building) at particular interest rate and redemption of capital at another rate of interest. Thus the YP or present value of Re 1 per annum for income @ 10% rate of interest and redemption of capital @ 5% rate of interest for a period of 25 years is 8.27 as per the tables (see Appendix). In other words, if a property is purchased for Rs. 8,00,000, its capitalized value will be 8.27 x 8,00,000 = 66,16,000.

 

Practice Yourself - Sinking Fund -------------------------------- What will be sinking fund for redeeming capital of Rs. 20 lacs at the end of 20 years @ 8% compound interest? ............................................. What will be the capitalized value of a property purchased for Rs. 6,00,000 for income @ 12% rate of interest and redemption of capital @ 8% rate of interest for a period of 15 years? ............................................. What will be sinking fund for redeeming capital of Rs. 50 lacs at the end of 15 years @ 9% compound interest? ............................................. What will be the capitalized value of a property purchased for Rs. 9,00,000 for income @ 6% rate of interest and redemption of capital @ 6% rate of interest for a period of 20 years?

 

ABM =53 BFM =49 IT = 63 Thanks sir, Gaikwad sir and all Got it in the very first attempt.

 

Cleared caiib in first attempt 47-47-67 Thanks murugansir

 

McMillan book is not sufficient to cover case studies n numericals of BFM exam..

 

Some recollected questions are as below: NDTL and CRR calculation case study, Case study on ALM, Case study on standardised approach of operation risk, export Case study on export bill cancellation and rebooking, Case study on time bucket gap, Case study on altman z model, Credit risk management, ECB start up case study as per new rules of RBI, Question on interset rate for FCNR deposit 1-3 year, Notice money, Full form of CRILC, Question on calculation of VAR, Que on VAR and back testing, 2 questions on liquidity ratios, Ques on provisioning of npa, Quest on pillar 3 disclosure frequency, ALCO objective, Bpv calculation, 2-3 questions on exchange rate calculation, Call option question, Quest on CLN, Trading book risk, Securitisation question, Total return swap, Quest on ADR, Question on stop loss and profit, Question on transfer pricing.

 

mam...I read from Macmillan book.....prepare kyc section well as more question were asked from it....

 

Thanks sir.. Its all because of your gud material..

 

confrats sara stamena last ke liye bachaya tha kya

 

Albert purchased 8%, 3 years bond of Rs. 10 lac, with annual interest payment and face value payable on maturity. The YTM is assumed@ 6%. Calculate the duration and modified duration.Explanation :Now, a = 0.943396 and a^t = 0.839619So, ΣPV×T = 80000 × 16.666 × (0.160381÷0.056604 – 2.518857) + 2518857= 419370.767 + 25188579= 2938227.77Pl express the full formula of ΣPV×T Because, in the above problem, he has given directly with out mentioning Formula.But I know very well about ΣP

 

Is the syllabus get Changed or what.. out of context question what the five Z ratios X1 ,x2 ... x5 and how to calculate them

 

Please provide all imp things about hosing and education loan

 

DAT – Delivered at Terminal Definition: This term means that the seller covers all the costs of transport (export fees, carriage, insurance, and destination port charges) and assumes all risk until after the goods are unloaded at the terminal. “Terminal” includes any place, whether covered or not, such as a quay, warehouse, container yard or road, rail or air cargo terminal. The buyer covers the cost of transporting the goods from the terminal or port to final destination and pays the import duty/taxes/customs costs. Note: With this arrangement, the seller assumes a large portion of the risks and costs of transport. This term applies to any mode of transport. DAP – Delivered at Place Definition: This term means that the seller pays all the costs of transportation (export fees, carriage, insurance, and destination port charges) up to and including the delivery of the goods to the final destination. The buyer is responsible to pay only the import duty/taxes/customs costs. The buyer also is responsible to unload the goods from the vehicle at the final destination. Note: The big difference between DAP and DAT is that with DAP the seller is responsible for the final leg of the journey and the buyer is responsible for the final unloading of the goods. This term applies to any mode of transport. DDP – Delivered Duty Paid Definition: This term means that the seller assumes all the risks and costs of transport (export fees, carriage, insurance, and destination port charges, delivery to the final destination) and pays any import customs/duty. The buyer has only to unload the goods at the final destination.

 

A 12 yr 9% semi-annual bond having 6 years remaining maturity with market yield of 6.20% has a price of Rs 113.85, which falls to Rs 113.32 at a yield of 6.30%. What is the BPV of the bond? a. 5.10 b. 5.20 c. 5.30 d. 5.40 Ans – c Solution BPV=CHANGE IN VALUE / CHANGE IN YIELD =(113.85-113.32)/(6.30-6.20) =0.53/0.10 = 5.30% Rs.53 per 1000 book value

 

Retail Banking - Credit Card Mr A drawing annual salary of Rs. 1500000 has been enjoying a credit card from your Bank.The bank has fixed a spending limit of Rs. 250000 lac on his card. During Dec,2014, he made purchase of Rs. 200000 and paid on due date (10 jan 2015) Rs. 140000 being a part of the outstanding amount of Rs. 250000.During Jan 2015,He wanted to make additional purchase of Rs. 100000 which bank allowed and he made purchase on 11 jan 2015.Rate of interest charged by bank s 3 per month. answer the following question 01. What would be the minimum payment requirement on credit card dues during any month? a.3% of due b.5% of due c.8% of As due d.10% of due Ans: Minimum payment require 5% 02. As the bank charges interest at 3% per month, what would be the annual effective rate to the user? a. 36% b. 42.58%* c. 39% d. None of the above Ans:b Solution Effective interest rate=(1+r)^n-1 =(1+0.03)^12-1 =1.42576-1 =0.42576 =42.58% 03. Daily interest charged on outstanding balance as on 11 jan,2015 will be a. Rs.207.12* b. Rs.210.72 c. Rs.202.10 d. Rs.207.00 Ans:a Solution Daily interest charged=Due outstanding*12/365*r =(110000+100000)*12/365*0.03 =210000*12*.03/365 =75600/365 =207.12 04. Total interest Charged on 10 Feb,2015 will be a. Rs.6420 b. Rs.6214* c. Rs.6312 d. Rs.6210 Ans:b Solution Total interest charged= no of days outstanding * Daily interest From 11 Jan 2015 to 10 Feb 2015 =30 days =30*207.12 =6214 05. If Mr A wants to clear all his dues on the due date on 10 Feb 2015, what amount would be required to pay Ans: . 216214 Solution outstanding amount+additional purchase+interest =110000+100000+6214 =216214 Thanks Narendra...

 

Basel III Capital Regulations - Revision RBI had allowed below items on the banks’ balance sheets to be included in the Tier-1, or core capital of banks. (i) Revaluation reserves at a discount of 55% (ii) Foreign currency translation reserve (FCTR) at a discount of 25% (iii) Deferred tax assets (DTAs) up to 10% of a bank’s CET1 capital Refer :

 

Given the following, Probability of occurrence = 4, Potential financial impact = 4, Impact of internal controls = 0%. What is the estimated level of operational risk? a. 3 b. 2 c. 0 d. 4 Ans – d Estimate level = √[probability of occurrence*potential financial impact ( 1-% of impact of internal controls )] = √4*4(1-0) = 4

 

Cleared retail in 2nd attempt with 74 marks First attempt 53 55 41 Thanks to @Kshitiz Agrawal murugan cbi Deepak Hooda sir and all group members.....

 

Cleared CAIIB in first attempt...48-45-63 Thanks alot sir your materials helped me alot...

 

From where to get updated information about home loan, tax benefits in home loan, education loan, vehicle loan, ATM pos limit, mobile bank transaction limit, internet banking transaction limit, mortgage loan, capital gain, Coz when we search rbi sites it provide details of older year in which the circular was issued

 

Dear all.. do anyone here own central banking (optional paper) previous experience ? With regards

 

Calculation of Economic Value of Equity Net Worth = 1350.00 RSA =18251.00 RSL = 18590.00 Modified duration GAP DA = 1.96 DL = 1.25 01. What is Weight (W) ? a. 1 b. 1.02 c. 1.33 d. 1.66 Ans - b Solution: Calculate weight (W) = RSL/RSA =18590/18251 =1.018 =1.02 ............................................. 02. What is DGAP ? a. 0.33 b. 0.48 c. 0.69 d. 0.81 Ans - c Solution DGAP (modified duration gap) = DA - (W*DL) = 1.96 - (1.02*1.25) = 1.96 - 1.1275 = 0.685 = 0.69 ............................................. 03. What is Leverage Ratio? a. 12.33 b. 13.22 c. 13.52 d. 13.66 Ans - c Solution Leverage ratio= RSA/ Networth = 18251/1350 = 13.52 ............................................. 04. What is Modified Duration of Equity? a. 6.33 b. 7.33 c. 8.33 d. 9.33 Ans - d Solution: Modified duration of equity (MD) = DGAP * leverage ratio = 0.69 * 13.52 = 9.3288 = 9.33 years ............................................. 05. If there is 200 bp change in Rate what is drop in Equity Value? a. 18.66 b. 20.33 c. 22.66 d. 24.33 Ans - a Solution Equity value=Change in rate (BP)*MD =200*9.33/100 =18.6576 =18.66%

 

Differences between suppliers credit and buyers credit

 

A bank’s G sec portfolio has 100 day VaR at 95% confidence level of 4% based on yield. What is the worst case scenario over 25 days? a. Increase in yield by 0.4% b. Decrease in yield by 0.4% c. Increase in yield by 2% d. Decrease in yield by 2% Ans - c Solution : 100 day VaR is 4 %. So one day Var is, 4 = one day VaR × square root of 100 4 = one day VaR × 10 One day VaR = 0.4 % 25 day VaR = 0.4 × square root of 25 = 0.4 × 5 = 2 % In worst case scenario yield will always increase. . Because this will decrease the market price or value. . Answer is increase in yield by 2 %

 

Any one is pursuing CAIIB with International Banking?