The CAIIB exam is not just about theoretical banking knowledge, it is about understanding how banks actually manage risks, capital, and financial stability in real-world operations. Among all BFM modules, Module D plays a very important role because it focuses on how a bank maintains a strong and stable balance sheet. From capital adequacy to liquidity planning and interest rate risk, this module builds your core understanding of modern balance sheet management.
If you are preparing for CAIIB BFM, practicing module-wise quizzes is one of the most effective ways to strengthen your concepts. In this blog, we have provided the CAIIB BFM Module D Practice Quiz along with a free downloadable PDF to help you revise faster and perform better in the exam.
Download CAIIB BFM Module D Practice Quiz PDF
Boost your CAIIB preparation with a structured and exam-focused practice PDF. It is designed to help banking professionals strengthen their understanding of international banking and practice effectively.
Attempt CAIIB BFM Module D Practice Quiz
Preparing for CAIIB BFM Module D requires a clear understanding of key concepts along with regular practice. Attempting practice quizzes is one of the most effective ways to test your knowledge, improve accuracy, and build confidence for the exam.
Q1. Under the Basel III framework as implemented in India by RBI, which of the following correctly describes the components included in Common Equity Tier 1 (CET1) capital?
Q2. A bank’s balance sheet shows the following data (₹ Crores): Paid-up Capital = 500, Free Reserves = 1,500, Perpetual Non-Cumulative Preference Shares (PNCPS) = 300, Perpetual Debt Instruments = 200, Subordinated Debt (eligible) = 600, Revaluation Reserves = 800. Under Basel III, what is the bank’s total Tier 1 capital? (Revaluation reserves are admitted at 45% discount.)
Q3. Under Basel III capital adequacy norms in India, what is the minimum Capital Conservation Buffer (CCB) that banks are required to maintain, and what form must this buffer take?
Q4. Under Basel III norms as implemented by RBI in India, what is the minimum CET1 ratio (excluding Capital Conservation Buffer), minimum Tier 1 ratio, and minimum Total Capital Adequacy Ratio (CRAR) required to be maintained?
Q5. A bank has the following data (₹ Crores): CET1 = 1,200, AT1 = 400, Tier 2 = 1,900. RWA for Credit Risk = 18,000, Capital Charge for Market Risk = 300, Capital Charge for Operational Risk = 500. Calculate the bank’s CRAR. (RWA for market and operational risk = Capital Charge × 12.5)
Q6. Under the Standardized Approach for credit risk under Basel II/III, what risk weight is assigned to claims on domestic public sector enterprises (PSEs) in India that are not treated as sovereign exposures?
Q7. Under the Internal Ratings-Based (IRB) Approach for credit risk under Basel II, which of the following four parameters are required to compute the regulatory capital requirement for a credit exposure?
Q8. Under Pillar 2 (Supervisory Review Process) of Basel II/III, banks are required to carry out an Internal Capital Adequacy Assessment Process (ICAAP). Which of the following best describes the primary objective of ICAAP?
Q9. Under Pillar 3 (Market Discipline) of Basel II/III, banks are required to make public disclosures. The disclosure of capital requirements for various risk types falls under which category?
Q10. Under Basel III, which of the following correctly describes the concept of ‘Countercyclical Capital Buffer (CCyB)’?
Q11. An Indian bank has the following loan portfolio data: Sub-Standard Assets (unsecured) = ₹200 Crores, Doubtful Assets (D1 – secured portion) = ₹300 Crores, Doubtful Assets (D2 – unsecured portion) = ₹100 Crores, Loss Assets = ₹50 Crores. Calculate the total provisions required as per RBI norms.
Q12. A non-performing loan account has been classified as a Doubtful Asset. The total outstanding is ₹500 Crores. The realisable value of security is ₹300 Crores. The account has been in the doubtful category for more than 3 years (D3 classification). What is the total provision required?
Q13. Under RBI’s NPA classification norms, a term loan account becomes NPA if overdue exceeds how many days?
Q14. In the SMA framework prescribed by RBI, an account overdue between 31 and 60 days is classified as:
Q15. A bank has an agricultural loan where interest is overdue for two crop seasons due to natural calamity. How should it be treated?
Q16. Under ALM, what is the primary role of ALCO?
Q17. A bank’s RSA = ₹8,000 Cr and RSL = ₹10,000 Cr. What is the interest rate sensitivity position?
Q18. What is Basis Risk in interest rate risk management?
Q19. Earnings at Risk (EaR) measures:
Q20. Under gap analysis, impact on NII is given by:
Quiz Summary
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What is included in CAIIB BFM Module D Balance Sheet Management?
CAIIB BFM Module D focuses on Balance Sheet Management, which explains how banks manage their assets, liabilities, risks, and capital to ensure financial stability. It covers key banking concepts like Asset-Liability Management (ALM), Basel norms, liquidity risk, and interest rate risk.
| Topic | Details |
| Components of Assets and Liabilities in Bank’s Balance Sheet | Structure of bank balance sheet, Asset-Liability Management (ALM), significance, objectives, and coordinated balance sheet management |
| Capital Adequacy – Basel Norms | Basel framework, Pillar 1 (minimum capital), Pillar 2 (supervisory review), Pillar 3 (market discipline), scope of application |
| Asset Classification and Provisioning Norms | Classification of assets, provisioning rules, NPA recognition and risk coverage |
| Liquidity Management | Meaning of liquidity, liquidity risk dimensions, measurement techniques, and risk management practices |
| Interest Rate Risk Management | Sources and impact of interest rate risk, measurement techniques, control strategies, RBI guidelines, and supervision practices |
| RAROC and Profit Planning | Economic capital, risk-adjusted return, profit planning, and capital allocation strategies |
Check: CAIIB BFM Important Topics
Why should you attempt CAIIB BFM Module D Practice Quiz & download PDF?
A practice quiz based on Module D helps you understand complex banking risk concepts in a simplified and exam-oriented manner. A downloadable PDF makes revision easy and accessible anytime.
Regular practice ensures better clarity in topics like ALM, Basel norms, and liquidity risk management, which are frequently asked in CAIIB exams.
- Concept-based MCQs for strong understanding
- Covers complete Module D syllabus in structured form
- Helps in quick revision before the exam
- Includes exam-level questions for real practice
- Useful for last-minute revision and self-assessment
Also Check: CAIIB Exam Date 2026
What are the benefits of practicing CAIIB BFM Module D questions?
Practicing Module D questions regularly helps banking professionals understand real balance sheet risk management practices used in banks.
- Better Concept Clarity: Understand ALM, Basel norms, and risk management easily
- Improved Accuracy: Reduce mistakes in conceptual and case-based MCQs
- Faster Decision Making: Helps in solving application-based questions quickly
- Stronger Exam Confidence: Familiarity with questions reduces exam pressure
What are the important topics in CAIIB BFM Module D?
Module D is highly practical and focuses on financial stability and risk control in banking operations. Below are the most important topics you should focus on:
| Topic | Key Points |
| Asset-Liability Management (ALM) | Components of balance sheet, ALM objectives, significance, coordinated management |
| Basel Norms (Capital Adequacy) | Basel framework, Pillar 1, Pillar 2, Pillar 3, regulatory capital requirements |
| Liquidity Management | Liquidity risk types, measurement tools, management techniques |
| Interest Rate Risk Management | Sources, effects, measurement methods, RBI guidelines, control strategies |
| Asset Classification & Provisioning | NPA classification, provisioning rules, risk coverage system |
| RAROC & Profit Planning | Risk-adjusted return, economic capital, profit optimization techniques |
Also Attempt:
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| CAIIB ABM Mock Test | Attempt Now |
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| CAIIB BRBL Mock Test | Attempt Now |
FAQs
It focuses on balance sheet management, risk control, and capital adequacy in banks.
It includes ALM, Basel norms, liquidity management, interest rate risk, and RAROC.
It helps understand how banks maintain financial stability and manage risks.
Yes, especially from liquidity risk and interest rate risk management topics.
It is concept-heavy, but regular practice makes it easier to understand and score well.
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