CAIIB BFM Syllabus 2025, Check Module-Wise Syllabus

The Bank Financial Management paper is an important subject in the CAIIB (Certified Associate of Indian Institute of Bankers) Exam, conducted by the IIBF. The CAIIB BFM Syllabus 2025 covers four main modules: International Banking, Risk Management, Treasury Management, and Balance Sheet Management. With the evolving nature of global finance and banking regulations, mastering the CAIIB BFM Syllabus is essential for bankers looking to take on more strategic and analytical roles in the industry.

CAIIB BFM Syllabus 2025

As one of the four compulsory papers in the CAIIB Exam, Bank Financial Management (BFM) plays a role in equipping banking professionals with the knowledge needed to handle complex financial functions. The CAIIB BFM Syllabus 2025 is designed to enhance understanding in areas like international banking operations. Since it is a compulsory paper alongside ABM, ABFM, and BRBL, mastering BFM is essential for clearing the CAIIB exam and advancing in a banking career. In this article, we have provided the full CAIIB Bank Financial Management Syllabus 2025.

CAIIB BFM Syllabus: Module-Wise

The CAIIB Bank Financial Management Paper includes 100 questions spread across four modules: Module A – International Banking, Module B – Risk Management, Module C – Treasury Management, and Module D – Balance Sheet Management. Below is the detailed module-wise CAIIB BFM Syllabus 2025.

CAIIB BFM Syllabus: Module A – International Banking

Exchange Rates and Forex Business

Foreign Exchange – Definition and Markets; Factors Determining Exchange Rates; Exchange Rate Mechanism; Foreign Exchange Dealing Room Operations; Derivative Products; RBI / FEDAI Guidelines; Foreign Exchange Arithmetic – Concepts and Examples

Liberalised Remittance Scheme (LRS) and other Remittance Facilities for Residents

Capital Account Transactions and Current Account Transactions; Key Sections under FEMA vis-à-vis Liberalized Remittance Scheme; Permissible/Non-permissible Remittances under LRS; Operational Guidelines; Remittances under LRS for Current Account Transactions; Tax Collected at Source (TCS); LRS vis-à-vis Capital Account Transactions; Reporting Requirements under LRS

Correspondent Banking and NRI Accounts

Correspondent Banking – Accounts and other Services; Nostro, Vostro and Loro Accounts; Electronic Modes of Transmission/Payment Gateways – SWIFT, CHIPS, CHAPS, RTGS, etc.; NRI Banking; NRI accounts – Rupee and Foreign Currency Accounts; Facilities to NRIs; Advances to Non-Residents against Non-Resident Deposits; Housing Loans to Non-Resident Indians

Documentary Letters of Credit

Definition of Letter of Credit; Types of Letters of Credit; Operations of Letter of Credit; UCP 600 and Important Articles; Liabilities, Responsibilities and Rights of the Parties; Documents under LC – Scrutiny, Crystallization, Follow-up for Bills under LC and Safeguardsfor Banks; Risks Relating to LC Transactions; Standby Letter of Credit (Similar to Guarantees); Uniform Rules for Bank-to-Bank Reimbursements (URR–725); International Standard Banking Practice – 745 (ISBP 745); Incoterms; Case Studies

Facilities for Exporters and Importers

Exchange and Trade Control Guidelines for Exporters; Facilities for Exporters;; Export Finance; Gold Card Scheme for Exporters; Export Data Processing and Monitoring System (EDPMS); Factoring and Forfaiting; Exchange and Trade Control Guidelines for Importers; Import Finance; Import Data Processing and Monitoring System (IDPMS); Trade Credit – Supplier’s Credit and Buyer’s Credit; Case Study on Export Finance

External Commercial Borrowings and Foreign Investments in India

External Commercial Borrowings – Concepts; ECBs – Other Operational Concepts; Reporting Requirements; Conversion of ECB into Equity; Foreign Investments; Key Concepts; Eligible Foreign Investors; Eligible Investee Entities; Eligible Investment Instruments; Prohibited Sectors; Rules Governing Pledge of Shares; Operational Guidelines; Snap Shot of Non-Debt Instruments (NDI) Rules; List of Documents for Obtention of Foreign Investments; List of Documents for Refund of Foreign Investments

Risks in Foreign Trade – Role of ECGC

Definition of Risk and Risks in International Trade; Country Risk; Export Credit Insurance in International Trade; ECGC Role and Products; ECGC Policies; ECGC’s Products for Banks; Other Aspects Relating to ECGC Policies and Guarantees; Some of the Common “To Do Points” under ECGC Policies; Claims

Role of EXIM Bank, Reserve Bank of India, Exchange Control in India – FEMA, FEDAI and Others

EXIM Bank – Role, Functions and Facilities; Reserve Bank of India – Role and Exchange Control Regulations in India; Foreign Exchange Management Act (FEMA) 1999; Role of FEDAI and FEDAI Rules; Short Notes on Other Topics: ECB and ADR/GDRs and FCCB;

International Financial Service Centres (IFSC), GIFTCity

Scope of IFSC in India; Opportunities at Gift City; Guidelines relating to setting up of IFSC Banking Units (IBUs); Role of IFSCA ; Regulatory Framework; Permissible Activities at IBUs; Relaxations for the FPI (Foreign Portfolio Investors) Entities at GIFT City

Technology in International Banking

Introduction to Digitization in International Banking – An Overview, Evolution of Technology in International Banking; Benefits and Limitations of Technology in International Banking; Digital Platforms in International Banking; FINTECH and evolution of FINTECH in International Banking; Delivery channels under FINTECH in International Banking; Sample process of International Trade Using Blockchain Technology; Challenges in FINTECH

CAIIB BFM Syllabus: Module B – Risk Management

Risk and Basic Risk Management Framework

What is Risk?, Linkages among Risk, Capital and Return; Why Risk Management?; Basic Risk Management Framework

Risks in Banking Business

Risk Identification in Banking Business; The Banking Book; The Trading Book; Off-Balance Sheet Exposures; Banking Risks – Definitions

Risk Regulations in Banking Industry

Regulation of Banking Industries – Necessities and Goals; The Need for Risk-based Regulation in a Changed World Environment; Basel I: The Basel Capital Accord; 1996 Amendment to Include Market Risk; Basel II Accord – Need and Goals; Basel II Accord; Towards Basel III; Capital Charge for Credit Risk; Credit Risk Mitigation; Capital Charge for Market Risk; Capital Charge for Operational Risk; Pillar 2 – Supervisory Review Process; Pillar 3 – Market Discipline; Capital Conservation Buffer; Leverage Ratio; Countercyclical Capital Buffer; Systemically Important Financial Institutions (SIFIs); Risk Based Supervision (RBS)

Market Risk

Market Risk – Concept; Market Risk in Banks; Market Risk Management Framework; Organisation Structure; Risk Identification; Risk Measurement; Risk Monitoring and Control; Risk Reporting; Managing Trading Liquidity; Risk Mitigation

Credit Risk

General; Credit Risk Management Framework; Organisation Structure; Risk Identification; Risk Measurement; Credit Risk Control and Monitoring; Credit Risk Policies and Guidelines at Transaction Level; Credit Control and Monitoring at Portfolio Level; Active Credit Portfolio Management; Controlling Credit Risk through Loan Review Mechanism (LRM); Credit Risk Mitigation; Securitisation; Credit Derivatives (CDs)

Operational Risk and Integrated Risk Management

Operational Risk – General; Operational Risk – Classification; Operational Risk Classification by Event Type – Definitions; Operational Risk Management Practices; Management Overview and Organisational Structure; Processes and Framework; Risk Monitoring and Control Practices; Operational Risk Qualification; Operational Risk Mitigation; Scenario Analysis; Integrated Risk Management; The Necessity of Integrated Risk Management; Integrated Risk Management – Challenges; Integrated Risk Management – Approach

Liquidity Risk Management

Liquidity Risk Management – Need & Importance; Potential Liquidity Risk Drivers; Types of Liquidity Risk; Principles for Sound Liquidity Risk Management; Governance of Liquidity Risk Management; Liquidity Risk Management Policy, Strategies and Practices; Management of Liquidity Risk; Ratios in respect of Liquidity Risk Management; Stress Testing; Contingency Funding Plan; Overseas Operations of the Indian Banks’ Branches and Subsidiaries and Branches of Foreign Banks in India; Broad Norms in Respect Of Liquidity Management; Liquidity Across Currencies; Management Information System; Reporting to the Reserve Bank of India; Internal Controls

Basel III Framework on Liquidity Standards

Liquidity Coverage Ratio; Liquidity Risk Monitoring Tools; Net Stable Funding Ratio

CAIIB BFM Syllabus: Module C – Treasury Management

Introduction to Treasury Management

The Concept; Functions of Integrated Treasury; The Process of Globalisation; Evolving Role of Treasury as Profit Centre; Organisation of Treasury

Treasury Products

Products of Foreign Exchange Markets; Money Market Products; Securities Market Products; Domestic and Global Markets

International Equity and Debt Products

Regulatory Environment; Global Depository Receipts; Indian Depository Receipts; External Commercial Borrowings; Trade Credits; Rupee Denominated Bonds

Funding and Regulatory Aspects

Reserve Assets: CRR and SLR; The Liquidity Adjustment Facility (LAF); Payment and Settlement Systems

Treasury Risk Management

Supervision and Control of Treasury; Market Risk and Credit Risk; Risk Measures: VaR and Duration; Use of Derivatives in Risk Management

Derivative Products

Derivatives and the Treasury; OTC and Exchange Traded Products; Forwards, Options, Futures and Swaps; Interest Rate and Currency Swaps; Developments in Indian Markets and RBI Guidelines on Risk Exposure

Treasury and Asset-Liability Management

Meaning of Asset-Liability Management (ALM), Liquidity Risk and Interest Rate Risk, Role of treasury in ALM, Use of derivatives in ALM, Credit Risks and Credit Derivatives, Transfer pricing, Policy Environment

CAIIB Bank Financial Management Syllabus: Module D – Balance Sheet Management

Components of Assets and Liabilities in Bank’s Balance Sheet and their Management

Components of a Bank’s Balance Sheet; What is Asset Liability Management?; Significance of Asset Liability Management; Purpose and Objectives of Asset Liability Management; ALM as Co-ordinated Balance Sheet Management

Capital Adequacy – Basel Norms

Scope of Application; Pillar-1 – Minimum Capital Requirements; Pillar 2- Supervisory Review Process; Pillar 3 – Market Discipline;

Asset Classification and Provisioning Norms

Asset Classification; Provisioning Norms

Liquidity Management

Definition; Dimensions and Role of Liquidity Risk Management; Measuring and Managing Liquidity Risk

Interest Rate Risk Management

Essentials of Interest Rate Risk; Sources of Interest Rate Risk; Effects of Interest Rate Risk; Measurement of Interest Rate Risk; Interest Rate Risk Measurement Techniques; Strategies for Controlling Interest Rate Risk; Controls and Supervision of Interest Rate Risk Management; Sound Interest Rate Risk Management Practices; RBI’s Draft Guidelines on Interest Rate Risk in Banking Book

RAROC and Profit Planning

Profit Planning; Risk Aggregation and Capital Allocation; Economic Capital and RAROC