Correct option is A
List-II (Description) | (Conceptualization) | Explanation |
|---|---|---|
A. Net Stable Funding Ratio (NSFR) | IV. Basel-III norms | NSFR is a liquidity standard under Basel-III that ensures banks maintain stable funding over a long-term horizon. |
B. Innovative Perpetual Debt Instrument | II. Tier-I capital | These are instruments that qualify as additional Tier-I capital under Basel norms, helping banks absorb losses. |
C. Tune Maturity Gap | I. Asset Liability Management | Managing the maturity gap between assets and liabilities is a key function of Asset-Liability Management (ALM). |
D. Risk Weighted Assets (RWA) | III. Tier-II capital | RWA measures a bank’s exposure to credit risk. Tier-II capital is used to cover unexpected losses linked to RWA. |
Information Booster:
Key Banking and Basel Norms Concepts:
Net Stable Funding Ratio (NSFR) – Ensures banks maintain a stable funding profile over time ( Basel-III liquidity norms).
Innovative Perpetual Debt Instruments – These are hybrid capital instruments qualifying as Tier-I capital under Basel guidelines.
Maturity Gap Management – Part of Asset-Liability Management (ALM), ensuring liquidity risk is minimized.
Risk-Weighted Assets (RWA) – A measure of credit risk, where capital requirements are linked to the bank’s exposure to risky assets.
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