Answer all 10 questions carrying equal marks
Time: 10 minutes
1) Corporate banking means (Answer – C)
a. Bank which is incorporated under a law doing business
b. Bank which finances only companies
c. Reflecting an array of commercial, transactional and electronic innovative products
2) Corporate banking involves only Fund based facilities (No)
a. Yes
b. No
3) A derivative contract is a structured product extended to a corporate (Yes)
a. Yes
b. No
4) Select three examples of Non fund based facilities granted by a bank from the following
a. A line of credit
b. Bills sent for collection (Answer)
c. Bills purchased and discounted
d. Forward contracts entered into (Answer)
e. A Letter of Credit opened (Answer)
f. Syndication of a loan with loan participation
5) Name three constituents of Retail product group (Product Unit, Acquisition unit and Collection unit)
6) Indicate the 5 C’s of evaluating a customer (Character, capacity, capital, collateral and cash flow)
7) Enumerate the three pillars of Basel II accord (Capital adequacy, Supervisory Review and Market discipline)
8) Differentiate between credit risk and market risk (Credit risk = Loss due to counter party failure Market risk Loss due to market forces like Interest rate)
9) Under camel rating the following ratios are used to determine
a. Securities to total investment = Capital adequacy
b. Net NPA to Net advances = Asset Quality
c. Market value to Equity capital = Management Quality
10) What do CRAMEL and CAMELS stand for?
a. Capital adequacy, Risk Management, Asset quality, Management quality, Earning capacity, Liquidity
b. S solvency – rest are as above
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