Difference between solvency and liquidity?
Solvency is defined as the firm’s potential to carry on business activities in the foreseeable future, to expand and grow. It is the measure of the company’s capability to fulfil…
What is CAGR? Should CAGR be high or low?
● The compound annual growth rate (CAGR) is the rate of return that would be required for an investment to grow from its beginning balance to its ending balance, assuming…
What are the important responsibilities of a Credit Analyst?
Your answer to this question, tells the interviewer, if you are aware of the responsibilities you’ll need to perform in this role, your capability, readiness, and commitment. Make sure that…
LIST THE BASIC ASSET LIABILITY MANAGEMENT (ALM) MODELS?
Analytical models are very important for ALM analysis and scientific decision making. The basic models are as follows: (a) GAP Analysis Model (b) Duration GAP Analysis Model (c) Scenario Analysis…
DISCUSS THE ROLE AND FUNCTIONS OF ASSET LIABLITY MANAGEMENT COMMITTEE
The Asset - Liability Committee (ALCO) consisting of the bank's senior management including CEO should be responsible for ensuring adherence to the limits set by the Board as well as…
ENUMERATE THE THREE REST PILLARS OF ALM PROCESS AS PER RBI GUIDELINES ?
As per the RBI Guidelines on Asset Liability Management (ALM) System, the ALM process rests on following three pillars: (i) ALM Information Systems • Management Information Systems • Information availability,…
DEFINE ASSET LIABILITY MANAGEMENT (ALM)?
Asset Liability Management (ALM) defines management of all assets and liabilities (both off and on balance sheet items) of a bank. It requires assessment of various types of risks and…
RBI GUIDELINES FOR VALUATION OF AVAILABLE FOR SALE
Available for sale (i) The individual scrips in the Available for Sale category will be marked to market at quarterly or at more frequent intervals. (ii) While the net depreciation…
RBI GUIDELINES FOR VALUATION OF HELD FOR TRADING
Held for Trading category The individual scrips in the Held for Trading category will be revalued at monthly or at more frequent intervals and provided for as in the case…
RBI GUIDELINES FOR VALUATION OF HELD TO MATURITY
Held to maturity i) Investments classified under Held to Maturity category need not be marked to market and will be carried at acquisition cost, unless it is more than the…
EXPLAIN THE CLASSIFICATION OF INVESTMENT PORTFOLIO OF THE BANKS?
The entire investment portfolio of the banks should be classified under three categories (a) Held to Maturity (b) Available for Sale and (c) Held for Trading. However, in the balance…