“Unlock Your Success in Concurrent Audit of Banks with Our Comprehensive Question Bank!”
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The following Topics are discussed in prokhata Quiz for concurrent audit of bank:
Module 1: Banking Basics and Regulations
- Introduction to Banking:
- Definition of a “banking company” and its core business.
- Understanding the role of banks in the financial system.
- Overview of different types of banks (commercial, cooperative, etc.).
- The Banking Regulation Act, 1949:
- Key sections of the Act:
- Licensing of banking companies.
- Powers of the Reserve Bank of India (RBI).
- Financial reporting and audits.
- Permissible business activities.
- Definition of a banking company.
- Key sections of the Act:
- Reserve Bank of India (RBI) and its Functions:
- Role of the RBI as the central bank.
- RBI’s functions:
- Issuing currency.
- Regulating banks and financial institutions.
- Setting monetary policy.
- Supervising the financial system.
- Understanding key RBI policies such as the Clean Note Policy.
Module 2: Capital Adequacy and Risk Management
- Capital Adequacy:
- Definition of capital adequacy and its importance.
- Capital Adequacy Ratio (CAR): what it is and how it is used.
- Understanding regulatory capital.
- The Basel Accords:
- Overview of the Basel framework and its three pillars:
- Pillar 1: Minimum Capital Requirements.
- Pillar 2: Supervisory Review Process.
- Pillar 3: Market Discipline.
- Concepts such as Common Equity Tier 1 (CET1), Goodwill and Deferred Tax Assets.
- Overview of the Basel framework and its three pillars:
- Risk Management in Banking:
- Different types of risks:
- Credit Risk.
- Market Risk.
- Operational Risk.
- Liquidity Risk.
- Country Risk.
- Understanding risk weights and their application.
- Credit risk mitigation techniques.
- Asset-Liability Management (ALM):
- Role of the Asset Liability Management Committee (ALMC).
- Integrated Test Facility (ITF).
- Different types of risks:
Module 3: Banking Operations and Services
- Core Banking System (CBS):
- Definition and purpose of CBS.
- Examples of CBS platforms (Finacle, FlexCube, BaNCS).
- Account Types:
- Different types of deposit accounts:
- Savings accounts.
- Current accounts.
- Term deposits (fixed deposits).
- Non-Resident (NRE and NRO) accounts.
- Small accounts.
- Different types of deposit accounts:
- Lending Operations:
- Types of lending facilities:
- Term loans.
- Cash Credit Overdraft (CCOD).
- Overdraft against book debts.
- Loan against Fixed Deposit Receipts (FDRs).
- Priority sector lending.
- Types of lending facilities:
- Payment Systems:
- Electronic Funds Transfer (EFT).
- Electronic Benefit Transfer (EBT).
- Demand drafts and their limitations.
- Cheques, handling, and related guidelines:
- UV examination of cheques.
- Account payee crossing.
- Dishonored cheque return time.
- ATM Operations:
- Customer rights in case of faulty ATM transactions.
- Reimbursement timelines.
- Head Office (HO) oversight.
- Other Banking Services:
- Bancassurance.
- Telebanking.
- Locker and vault services.
- Agency Services:
- Currency chest operations.
- Fund Based vs. Non Fund Based Services:
- Understanding which services are funded or non funded.
Module 4: Credit Management and Loan Assessment
- Credit Assessment and Loan Appraisal:
- Key parameters for evaluating loan applications.
- The 5 C’s of Credit.
- Credit proposal evaluation.
- Role of Credit Information Companies (CICs).
- Centralized Credit Processing Units (CCPUs):
- Role and responsibilities of CCPUs.
- Timelines for processing credit proposals.
- Loan Classification:
- Standard assets.
- Non-Performing Assets (NPAs).
- Special Mention Accounts (SMA).
- Substandard assets.
- Doubtful assets.
- Loss assets.
- Income Recognition and Asset Classification (IRAC) Norms.
- Provisioning for NPAs:
- How banks make provisions for potential losses.
- Impact of provisioning on risk weight.
- Provision Coverage Ratio (PCR).
- Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) Scheme.
- Due Diligence Reports:
- When due diligence is required.
- Professionals that prepare due diligence reports.
- Legal Audit:
- Purpose of legal audit and when it is required.
- MSME Loan Restructuring.
- Willful Defaulters.
- Recovery of NPAs:
- The SARFAESI Act.
- The Insolvency and Bankruptcy Code (IBC).
- Committee of Creditors (CoC).
- Winding up of a Company.
Module 5: Financial Instruments, Markets, and Treasury
- Money Market Instruments:
- Call money.
- Commercial Paper (CP).
- Certificate of Deposit (CD).
- Treasury Bills (T-bills).
- Fixed Income Market:
- Government securities (G-Secs).
- Role of the Public Debt Office (PDO).
- Subsidiary General Ledger (SGL).
- Non-SLR securities.
- Financial Derivatives:
- Cross currency interest rate swaps.
- Mutual Funds Regulations:
- Investment policies and limits.
- Valuation of securities.
- Financial Institutions and Markets:
- FIMMDA (Fixed Income Money Market and Derivatives Association of India).
- The Gilt-Edged Market.
- Capital Market.
- Money Market.
- Foreign Exchange (Forex) Market:
- Bid-ask spread.
- Outright forward rate and swap points.
- Outright spot rate.
- Monetary policy instruments:
- Repo rate.
- Bank rate.
- Cash Reserve Ratio (CRR).
- Statutory Liquidity Ratio (SLR).
- Priority Sector Lending.
- Pre-shipment Credit in Foreign Currency (PCFC).
Module 6: Financial Accounting, Planning, and Analysis
- Financial Statements:
- Profit and Loss Account.
- Balance Sheet.
- Budgeting:
- Types of budgets: fixed, master, functional, product, customer, cash.
- Budgetary control systems and flexibility.
- Key purposes of budgeting.
- Cash Management:
- Cash budget.
- Sources of cash inflow.
- Cash conservation techniques.
- Working Capital Management:
- Components of working capital.
- Methods for working capital assessment (e.g., cash budget system).
- Maximum Permissible Bank Finance (MPBF).
- Net Working Capital (NWC).
- Working Capital Assessment.
- Capital Budgeting:
- Capital budgeting process and strategic planning.
- Evaluation techniques:
- Net Present Value (NPV).
- Internal Rate of Return (IRR).
- Payback period.
- Average Rate of Return (ARR).
- Cost of Capital.
- Hurdle Rate.
- Time Value of Money.
- Discount rate.
- Financial structure.
- Project finance.
- Break-Even Analysis.
- Cost Accounting:
- Fixed and variable costs.
- Prime and conversion costs.
- Financial Ratios:
- Debt Equity Ratio.
- Current Ratio.
- Financial Metrics and Concepts.
- Analysis of Project Cash Flow.
Module 7: Compliance, Auditing, and Reporting
- Know Your Customer (KYC) Norms.
- Anti-Money Laundering (AML) Laws and the Prevention of Money Laundering Act (PMLA), 2002.
- Reporting Requirements:
- Suspicious Transaction Report (STR).
- High-Value Transaction (HVT) report / Cash Transaction Report (CTR).
- Monthly and quarterly returns of assets and liabilities.
- Annual return of unclaimed accounts.
- DSB-IV Return.
- Auditing:
- Concurrent audit.
- Standards on Internal Audit (SIA).
- Statutory Audit and Long Form Audit Report (LFAR).
- RBI Guidelines.
- Risk based approach to audits.
Module 8: Specialized Topics
- International Trade:
- Balance of Payments (BOP).
- Export finance and documents.
- Letter of Credit (LC) and Standby LC.
- Export credit insurance.
- Ministry of Commerce.
- Factoring.
- Bank Guarantees.
- Liberalized Remittance Scheme (LRS).
- Mortgage Types and Subprime Lending.
- Regional Rural Banks (RRBs):
- Ownership and shareholding structure.
- Regulatory framework.
- Nature and purpose.
- Interest Not Collected Account (INCA).
- Unrealized Interest.
- The concept of ‘haircuts’.
- Collateralized Risk Mitigation (CRM).
- Loans against National Savings Certificates (NSC).
- Loans against life insurance policies.
- Account ‘Out of Order’.
- Level-3 Loss Event Classification.
- Lines of Credit.
- Interest calculation.
- Stamp paper and document execution.
- Short Term vs. Long Term Financing.
- Matching Approach to financing.
- Treasury Bills (T-Bills).
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