Attempt CAIIB Risk Management PYP Quiz and Download PDF

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Published on 15 May 2026 by

Preparing for the CAIIB Risk Management elective paper requires more than just reading theory it demands clarity of Basel norms, RBI capital adequacy rules, liquidity ratios, and strong case-study solving ability. This paper is known for its numerical depth and concept linkage, especially around Basel III, LCR, NSFR, and market risk tools.

In this blog, we have provided a CAIIB Risk Management memory-based quiz along with a free downloadable PDF.

Download CAIIB Risk Management Previous Year Papers

Boost your CAIIB Risk Management 2026 preparation by focusing on questions asked from CAIIB Risk Management Previous Year Papers. Each question is provided with the correct answer and simple explanation to help you strengthen key concepts like Basel III, LCR, NSFR, VaR, and capital adequacy norms. The direct download link is given below:

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CAIIB HRM Previous Year PaperDownload Free PDF

Attempt CAIIB Risk Management Previous Year Paper Quiz

Check your preparation level with our CAIIB Risk Management Previous Year Paper Quiz designed to improve accuracy, speed, and exam readiness.

CAIIB Risk Management PYP Practice Quiz Score: 0.00

1. As per RBI guidelines, what is the minimum Common Equity Tier 1 (CET-1) capital requirement as a percentage of Total Risk Weighted Assets (RWA)?

2. What is the maximum permissible limit for Additional Tier 1 (AT1) capital as a percentage of Total RWA under RBI guidelines?

3. A bank’s Total RWA is ₹800 crore. What is the minimum Tier 1 Capital it must maintain as per RBI guidelines?

4. Under Basel III (RBI guidelines), what is the Minimum Total Capital (MTC) requirement as a percentage of Total RWA?

5. What is the Capital Conservation Buffer (CCB) prescribed under RBI’s Basel III framework?

6. A bank has Total RWA of ₹500 crore. What is the minimum capital it must hold including the Capital Conservation Buffer (CCB)?

7. Under RBI’s Basel III guidelines, the maximum Tier 2 capital that can be included is:

8. Which of the following is NOT a component of Tier 1 Capital under Basel III?

9. The Liquidity Coverage Ratio (LCR) under Basel III requires that the ratio of High Quality Liquid Assets (HQLA) to Net Cash Outflows over 30 days must be:

10. Which level of HQLA assets attracts a 15% haircut under the LCR framework?

11. Under the LCR framework, the combined limit for Level 2A and Level 2B assets in HQLA is:

12. A bank holds Level 2B assets of ₹30 crore. Its total HQLA is ₹150 crore. Is this compliant with LCR guidelines?

13. The Net Stable Funding Ratio (NSFR) is calculated as:

14. What is the minimum required value of the Net Stable Funding Ratio (NSFR) under Basel III?

15. Under the LCR framework, Level 1 HQLA assets attract a haircut of:

16. The Herfindahl-Hirschman Index (HHI) is primarily used in banking risk management to measure:

17. Gap Analysis in banking is primarily used to measure:

18. Net Interest Income (NII) is defined as:

19. If a bank’s interest income is ₹200 crore and interest expenses are ₹130 crore on average earning assets of ₹2,000 crore, what is its Net Interest Margin (NIM)?

20. Value at Risk (VaR) measures:

21. A bank calculates a 1-day VaR of ₹10 crore at a 99% confidence level. This means:

22. Duration in the context of interest rate risk management measures:

23. A Credit Default Swap (CDS) is best described as:

24. Under Basel III, what does MCLR stand for and what is its primary purpose?

25. EBLR (External Benchmark Lending Rate) links loan pricing to:

26. Case Study: Bank XYZ has the following capital structure — CET-1: ₹55 crore, AT1: ₹15 crore, Tier 2: ₹20 crore, and Total RWA: ₹1,000 crore. Is the bank compliant with RBI’s minimum CET-1 requirement?

27. Case Study: Bank ABC has Total RWA of ₹2,000 crore. It holds CET-1 of ₹120 crore, AT1 of ₹30 crore, and Tier 2 of ₹50 crore. What is the Minimum Total Capital shortfall (if any) including CCB?

28. A bank has Level 1 HQLA of ₹200 crore, Level 2A HQLA of ₹80 crore (before haircut), and Level 2B HQLA of ₹60 crore (before haircut). What is the effective HQLA after applying haircuts?

29. In the context of interest rate risk, a positive gap in Gap Analysis means:

30. Which of the following best describes a ‘Call Option’ in the context of banking and risk management?

31. Under Basel III, which of the following is the correct hierarchy of capital quality from highest to lowest?

32. Case Study: A bank’s loan portfolio is concentrated in the textile sector with 70% exposure. Using the HHI framework, which risk is the bank most exposed to?

33. A bank’s Net Interest Income is ₹90 crore on average earning assets of ₹1,500 crore. What is its Net Interest Margin (NIM)?

34. Which of the following statements about the Capital Conservation Buffer (CCB) is CORRECT?

35. A Put Option gives the holder the:

36. Case Study: Bank PQR has LCR-related data: HQLA (after haircuts) = ₹500 crore; Expected net cash outflows in 30 days = ₹450 crore. Is the bank LCR-compliant? What is the LCR?

37. Under Basel III, Level 2B HQLA assets are subject to a haircut of:

38. Which of the following credit risk models is primarily used to estimate the probability of default (PD) of a borrower?

39. Case Study: Bank DEF has the following data: CET-1 = ₹110 crore, AT1 = ₹30 crore, Tier 2 = ₹40 crore, RWA = ₹2,000 crore. Calculate the Total Capital Ratio and check MTC compliance.

40. The primary purpose of the NSFR under Basel III is to:

41. Case Study: A bank’s Gap Report shows rate-sensitive assets of ₹800 crore and rate-sensitive liabilities of ₹1,000 crore in the 1-year bucket. If interest rates rise by 1%, what is the approximate impact on NII?

42. In the Basel III capital framework, which instrument is typically classified as Additional Tier 1 (AT1) capital?

43. Under RBI’s Basel III guidelines, the maximum permissible Level 2B assets as a percentage of total HQLA is:

44. Case Study: Bank GHI holds HQLA as follows — Level 1: ₹300 crore, Level 2A (before haircut): ₹100 crore, Level 2B (before haircut): ₹60 crore. The bank’s total HQLA (after haircuts) is:

45. Which of the following is a correct statement about MCLR and EBLR?

46. The Herfindahl-Hirschman Index (HHI) is calculated as:

47. Case Study: Bank RST has the following capital data: CET-1 = ₹66 crore, AT1 = ₹18 crore, Tier 2 = ₹16 crore, RWA = ₹1,200 crore. Which capital requirement is the bank FAILING to meet?

48. In Value at Risk (VaR) measurement, which method uses historical simulation of portfolio returns?

49. Case Study: A corporate borrower approaches Bank LMN for a loan. The bank uses a credit risk model and arrives at PD = 3%, LGD = 60%, and EAD = ₹500 crore. What is the Expected Loss (EL)?

50. Under Basel III, the total capital adequacy requirement (MTC + CCB) of 11.5% as per RBI guidelines consists of which of the following components?

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Attempt A Free CAIIB Risk Management Mock Test

Why is Basel 3 most important in CAIIB Risk Management exam?

Basel III is one of the most frequently asked and high-weightage topics in the Risk Management paper. Questions are often case-study based and appear in every shift, especially second and third shifts. Understanding CET-1, AT1, Tier 1, Tier 2, and capital buffers is crucial for solving numerical problems. These concepts are directly linked to RBI capital adequacy norms. A strong grip on Basel III can secure easy marks in the exam.

ComponentRequirement (% of RWA)Key Point
CET-1 Capital5.5%Core capital base
Additional Tier 1 (AT1)1.5%Hybrid capital
Tier 1 Capital7%CET-1 + AT1 combined
Tier 2 Capital2%Supplementary capital
Minimum Total Capital (MTC)9%Basic requirement
Capital Conservation Buffer (CCB)2.5%Safety buffer
Total Requirement (MTC + CCB)11.5%Final capital standard
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What should be the exam strategy for CAIIB Risk Management paper?

A smart exam strategy plays a major role in scoring well in Risk Management. Since the paper includes numericals and case studies, time management becomes critical. Candidates should first attempt easy questions and avoid getting stuck on lengthy problems at the start. This helps in building confidence and securing quick marks. Difficult questions should be attempted later in the exam.

SectionKey Points
Recommended Strategy• First attempt 30–40 easy questions
• Move to moderate questions next
• Leave lengthy case studies for later
• Avoid starting with calculation-heavy questions
• Manage time strictly to avoid unanswered questions
Time Management Tips• Divide time in 3 phases Easy – Moderate – Difficult
• Do not spend excessive time on a single case study
• Keep last 10–15 minutes for revision
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Which liquidity and regulatory ratios are important for CAIIB Risk Management?

Liquidity ratios like LCR and NSFR are very important for exam success. These ratios test understanding of bank liquidity health and stability requirements under Basel III. Questions are often formula-based and conceptual. RBI guidelines are strictly followed in these questions. Proper understanding helps in solving direct numerical problems.

  • LCR (Liquidity Coverage Ratio):
    • Formula: HQLA / Net Cash Outflows (30 days)
    • Requirement: ≥ 100%
    • HQLA Levels:
      • Level 1: 0% haircut
      • Level 2A: 15% haircut
      • Level 2B: 50% haircut
    • Limit: 2A + 2B ≤ 40%, 2B ≤ 15%
  • NSFR (Net Stable Funding Ratio):
    • Formula: Available Stable Funding / Required Stable Funding
    • Requirement: ≥ 100%
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Which Risk Management topics are frequently asked in exams?

The CAIIB Risk Management paper includes both theoretical and numerical questions. Many topics are repeatedly asked in previous year papers. These topics form the core of the exam and should be revised thoroughly. Case-study based questions are mostly framed from these concepts. Strong preparation in these areas increases scoring potential.

  • Basel III capital adequacy framework
  • Value at Risk (VaR)
  • Duration and interest rate risk
  • Gap analysis and NII/NIM
  • Credit Default Swap (CDS)
  • HHI Index (market concentration)
  • MCLR and EBLR benchmarking rates
  • Call and Put options
  • Credit risk models
  • Liquidity ratios (LCR, NSFR)

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FAQs

1. Why should I solve CAIIB Risk Management previous year papers?

They help understand exam pattern, difficulty level, and important topics.

2. Is Basel III important for CAIIB Risk Management?

Yes, Basel III is one of the most frequently asked topics in the exam.

3. What are the key capital components in Basel III?

CET-1, AT1, Tier 1, and Tier 2 capital.

4. What is the minimum Total Capital Requirement as per RBI?

It is 9% of Risk Weighted Assets (RWA).

5. What is the purpose of LCR in Risk Management?

It ensures banks have enough liquid assets to survive short-term stress.