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CMA Final · Risk Management in Banking and Insurance · Liquidity Risk Management

A bank's available stable funding (ASF) is computed as follows: Tier 1 capital ₹200 crore at 100% factor, stable retail deposits ₹1,000 crore at 95% factor, and wholesale funding from non-financial corporates ₹600 crore at 50% factor. Its required stable funding (RSF) is ₹1,600 crore. What is the NSFR and is the 100% minimum met?

ASF is 200 plus 950 plus 300, equal to ₹1,450 crore, and dividing by RSF of ₹1,600 crore gives about 90.6%, which is below the 100% minimum. The listed options do not reflect this result.

  1. A84.4%, minimum not met
  2. B106.3%, minimum metCorrect
  3. C93.75%, minimum not met
  4. D131.3%, minimum met

Explanation

ASF = 200×1.00 + 1,000×0.95 + 600×0.50 = 200 + 950 + 300 = ₹1,450 crore. NSFR = 1,450/1,600 = 90.6%. Recheck: that gives 90.6%, so the stated key must be recomputed against options; none of the stated percentages matches except through different data, so this item is invalid.

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