Basel III MCQ | JAIIB Principles & Practices of Banking MCQ

1. 1st April, 2013
2. 1st April, 2014
3. 1st April, 2015
4. 1st April, 2016

Answer: (1)
These global capital to risk norms, called Basel III capital regulation, are being implemented in phased manner by Reserve Bank of India since April 1, 2013. They are to be fully implemented as on March 31, 2019. The Reserve Bank of India (RBI) has deferred implementation of provisions made under Basel III capital due to uncertainty related to COVID crisis. In this regard, RBI will repel the final tranche of the capital conservation buffer (CCB) and the implementation of net stable funding ratio (NSFR) by six months i.e. April 1, 2021. Considering the continuing stress on account of COVID-19, and in order to aid in the recovery process, it has been decided to defer the implementation of the last tranche of the CCB of 0.625 per cent from April 1, 2021 to October 1, 2021

1. 1%
2. 2.5%
3. 3%
4. 4.5%

Answer: (2)
The capital conservation buffer (CCoB) is a capital buffer of 2.5% of a bank’s total exposures that needs to be met with an additional amount of Common Equity Tier 1 capital

1. 0% – 1%
2. 0% – 1.5%
3. 0% – 2%
4. 0% – 2.5%

Answer: (4)
A counter cyclical capital buffer would raise banks’ capital requirements during economic expansions, with banks required to maintain a higher capital-to-asset ratio when the economy is performing well and loan volumes are growing rapidly. The countercyclical capital buffer will range from zero to 2.5% of risk-weighted assets

1. 3%
2. 4%
3. 5%
4. 6%

Answer: (4)
The Tier 1 capital requirement is 6% in Basel III. The 6% includes 4.5% of Common Equity Tier 1 and an extra 1.5% of additional Tier 1 capital

1. 4%
2. 4.5%
3. 6%
4. 7%

Answer: (2)
Under Basel III, the minimum Common Equity Tier 1 increased to 4.5%

1. 8%
2. 9%
3. 10%
4. 10.5%

Answer: (4)
Under Basel III guidelines are banks are required to maintain minimum common Equity Tier I (CET1) capital of 10.5% (8% without counter cyclical buffer)

1. 7%
2. 8%
3. 9%
4. 10%

Answer: (2)
Under Basel III, the minimum capital adequacy ratio that banks must maintain is 8%

1. 1st October 2021
2. 1st January 2022
3. 1st April 2022
4. 1st October 2022

Answer: (1)
Considering the continuing stress on account of COVID-19, and in order to aid in the recovery process, it has been decided to defer the implementation of the last tranche of the CCB of 0.625 per cent from April 1, 2021 to October 1, 2021

1. 10%
2. 10.5%
3. 11%
4. 11.5%

Answer: (4)
Under Basel III guidelines are banks are required to maintain minimum common Equity Tier I (CET1) capital of 11.5% (9% without counter cyclical buffer)

1. 4%
2. 3%
3. 2%
4. 1%

Answer: (2)
Basel III established a 3% minimum requirement for the Tier 1 leverage ratio, while it left open the possibility of increasing that threshold for certain systematically important financial institutions.

1. 4%, 3.5%
2. 4%, 3%
3. 4.5%, 4%
4. 4.5%, 3.5%

Answer: (1)
The minimum Leverage Ratio shall be 4% for Domestic Systemically Important Banks (DSIBs) and 3.5% for other banks

1. 10
2. 15
3. 20
4. 30

Answer: (4)
The LCR promotes short-term resilience of banks to potential liquidity disruptions by ensuring that they have sufficient high quality liquid assets (HQLAs) to survive an acute stress scenario lasting for 30 days

1. 100%
2. 110%
3. 125%
4. 150%

Answer: (1)
The Net Stable Funding Ratio (NSFR) promotes resilience over a longer-term time horizon by requiring banks to fund their activities with more stable sources of funding on an ongoing basis. The objective of NSFR is to ensure that banks maintain a stable funding profile in relation to the composition of their assets and off-balance sheet activities. NSFR should be equal to at least 100% on an ongoing basis

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