BASEL related questions for RBI Grade B

Dear aspirants,
We are presenting you the BASEL related questions for RBI Grade B under Finance and Management Section of the exam. BASEL guidelines are very important for RBI Grade B exam as these guidelines have direct implications on financial sector of the economy. It determines the resilience of the banking sector an economy.

1. Which among the following constitutes Tier-I capital of banks according to BASEL Accord?
   a) Shareholder’s equity
   b) Disclosed Reserves
   c) Revaluation Reserves
   d) Undisclosed Reserves
   Select the correct answer from following options:
   1. Only a and b
   2. Only a and d
   3. a, b and c
   4. All are correct
2. Which among the following constitutes Tier-II capital of banks according to BASEL Accord?
   a) Revaluation Reserves
   b) Hybrid Capital Instruments
   c) Subordinated Debts
   d) General Loan-loss Reserves
   Select the correct answer from following options:
   1. Only a and b
   2. Only a and d
   3. a, b and c
   4. All are correct
3. When BASEL-I guidelines were published?
   1. 1988
   2. 2004
   3. 2010
   4. 2013
4. When BASEL-II guidelines were published?
   1. 1988
   2. 2004
   3. 2010
   4. 2013
5. When BASEL-III guidelines were published?
   1. 1988
   2. 2004
   3. 2010
   4. 2013
6. Among how many pillars BASEL-III guidelines are divided?
   1. 1
   2. 2
   3. 3
   4. 4
7. Which among the following constitutes the three pillars of BASEL-III?
   a) Prevention of Bank impairment
   b) Minimum Capital Requirement
   c) Supervisory Review Process
   d) Market Discipline
   Select the correct answer from following options:
   1. Only a and c
   2. Only b, c and d
   3. Only a, b and c
   4. All are correct
8. According to BASEL guidelines, who conducts Internal Capital Adequacy Assessment Process (ICAAP)?
   1. Reserve Bank of India
   2. Indian Bank’s Association
   3. An independent third party audit company
   4. Conducted by bank itself
9. According to BASEL guidelines, who conducts Supervisory Review and Evaluation Process (SERP) in India?
   1. Reserve Bank of India
   2. Indian Bank’s Association
   3. An independent third party audit company
   4. Conducted by bank itself
10. Which among the following is/are true with respect to Capital Conservation Buffer ?
    a) It is used to absorb losses during period of financial and economic stress
    b) Banks are required to hold capital conservation buffer of 2.5% of Risk Weighted Assets (RWA)
    c) It must be met exclusively with common equity
    d) It is imposed in the range of 0-2.5% of common equity
    Select the correct answer from following options:
    1. Only b, c and d
    2. Only a and d
    3. a, b and c
    4. All are correct

Answers

1. 1
   Tier-1 capital consists of Shareholder’s equity and disclosed reserves. It is bank’s highest quality capital.
2. 4
   Tier-2 capital consists of Undisclosed reserves, revaluation reserves, hybrid capital instruments, subordinated debts and general loan-loss reserves. It is used to absorb losses on gone-concern basis.
3. 1
4. 2
5. 3
6. 3
7. 2
   BASEL guidelines are based on three pillars: first is Minimum Capital Requirement, second is Supervisory Review Process and third one is Market Discipline.
8. 4
   As per BASEL guidelines, ICAAP is conducted by Banks themselves.
9. 1
   As per BASEL guidelines, SERP is conducted by Regulator of banking system of country i.e RBI in case of India.
10. 3

We hope you liked the quiz. We will post more BASEL related questions for RBI Grade B in our next quiz.

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