Banking Awareness Questions Set 97 (Basel III)

Banking Awareness Questions on Basel III for upcoming bank and insurance exams IPPB, SBI PO, IBPS PO/Clerk, RRB PO/Clerk, RBI, BoB and other exams.

  1. RBI implemented the Basel-III recommendations in India w.e.f______
    A) January 1, 2013
    B) March 31, 2013
    C) April 1, 2013
    D) September 30, 2013
    View Answer
      Option C
    Explanation:
    Basel III implementation began w.e.f. April 1, 2013. Reserve Bank issued Guidelines based on the Basel III reforms on capital regulation on May 2, 2012, to the extent applicable to banks operating in India. Banks have started implementing the guidelines from April 1, 2013 in India in a phased manner.
  2. Basel III recommendations shall be completely implemented in India by_______
    A) March 31, 2020
    B) March 31, 2019
    C) March 31, 2018
    D) March 31, 2021
    View Answer
      Option B
    Explanation:
    The Basel III guidelines are expected to be fully implemented by March 31, 2019.
  3. Basel III capital regulations were released by Basel Committee on Banking Supervision (BCBS) as a Global Regulatory Framework for more resilient banks and banking systems on______________
    A) December 2010
    B) March 2011
    C) December 2011
    D) December 2012
    View Answer
      Option A
    Explanation:
    The BCBS released comprehensive reform package entitled “Basel III: A global regulatory framework for more resilient banks and banking systems” (known as Basel III capital regulations) in December 2010. 
  4. Basel III capital regulations are based on 3 mutually reinforcing pillar. These pillars are:
    I. Minimum Capital Standards
    II. Supervisory Review of Capital Adequacy
    III. Risk Management
    A) Only I & II
    B) Only I & III
    C) Only II & III
    D) All are correct
    View Answer
      Option A
    Explanation:
    The third pillar is Market Discipline
  5. To calculate capital adequacy ratio, the banks are required to take into account which of the following risks?
    A) Credit risk and Operational risk
    B) Credit risk and Market risk
    C) Market Risk and Operational Risk
    D) Credit Risk, Market risk and Operational risk
    View Answer
      Option D
  6. As per the Basel III implementation in India, minimum Tier 1 capital must be _____ % of risk weighted assets on ongoing basis
    A) 5.5%
    B) 7%
    C) 9%
    D) 11%
    View Answer
      Option B
    Explanation:
    Tier 1 capital must be at least 7% of RWAs on an ongoing basis. 
  7. Which of the following statements is not correct regarding Basel III implementation in India?
    A) Minimum Tier 1 capital ratio should be 8%
    B) Maximum Tier 2 capital should be 2%
    C) Minimum total capital ratio should be 9%
    D) Minimum total capital ratio plus capital conservation buffer should be 11.5%
    View Answer
      Option A
    Explanation:
    Banks are required to maintain a minimum Pillar 1 Capital to Risk-weighted Assets Ratio (CRAR) of 9% on an on-going basis
  8. The net stable funding ratio (NSFR) under Basel-III was implemented in India from_______
    A) January 1, 2017
    B) April 1 ,2017
    C) January 1, 2018
    D) April 1 ,2018
    View Answer
      Option C
    Explanation:
    The Reserve Bank proposed to make NSFR applicable to banks in India from January 1, 2018.
  9. As per Basel III, the risk of losses in on-balance sheet and off-balance sheet positions arising from movements in market prices is called___________
    A) Credit Risk
    B) Market Risk
    C) Pricing Risk
    D) Liquidity Risk
    View Answer
      Option B
    Explanation:
    Market Risk is the risk of losses in on-balance sheet and off-balance sheet positions arising from movements in market prices.
  10. Which among the following are domestic credit rating agencies approved by RBI for the purpose of credit rating to determine risk weight for rated exposures?
    I. Brickwork
    II. CARE
    III. FITCH
    IV. SMERA
    A) II AND IV
    B) I, II, III, IV
    C) I, II, IV
    D) II, III, IV
    View Answer
      Option C
    Explanation:
    Fitch is in New York

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34 thoughts on “Banking Awareness Questions Set 97 (Basel III)”

  1. Hello aspirantszone.com webmaster, You always provide great examples and real-world applications, thank you for your valuable contributions.

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