1

2
3
4

PROBLEM 2
average deposits
equity
average interest on SLR inv
CRR
SLR

average interest on loans

manpower cost to average deposits
other overheads to average deposits
other income
what is the average rate of interest Bank B can pay on deposits if it wants to earn a profit
of Rs 60 crore for the period?

problem 3
Bank A proposed to borrow on Jan 7, 2015 Rs 1 crore from Bank B for 7 days at 7% repo rate.
the security for this transaction is 7.6% 2020 G secs. The current price of this security is Rs 99.81.l
It pays out interest semi annually on 7th april and 7th october.
What will the transactions be?

sol
PROBLEM 1
The following are the assets and liabilities of Bank A on October 4, 2019, a reporting Friday
[Rs crore]
liabilities amount
capital 150
reserves 480
deposits
from banks 700
from others 4900
borrowings
from RBI 5
from other banks 700
other liabilities 380

TOTAL 7315

CALCULATE
NDTL on October 4, 2019 6075
CRR requirement at 4.5% on liabilities to 237.6
SLR requirement at 25% on NDTL 1518.75
Of the balances with RBI, Rs 200 crore are the bank's own .
of 95% of the CRR requirement every day over the maintenan .
borrow in the market to maintain CRR [if the banks own fund.
What is the maintenance period for CRR and SLR? oct 19 to nov 1

[Rs crore] solution

3250 assume all balancloanable funds
550 income from loan fund
9% income SLR
5% other income
25% total

15% manpower
7% other
 2% profit needed
25% of total income
Bank B can pay on deposits if it wants to earn a profit now amount can be dispensed as

rate

an 7, 2015 Rs 1 crore from Bank B for 7 days at 7% repo rate.

is 7.6% 2020 G secs. The current price of this security is Rs 99.81.lakhs.
y on 7th april and 7th october.

Value of the security 9981000

add interset
from 7th oct to 7th jan 192111.11111111
dirty price 10173111.111111

assuming 1 crore is borrowed

interest for 7 days 13424.657534247

total ampount to be paid back 10013424.657534

dirty price on Date of repurchase 10187888.8889

transactions
Bank A sell securities 10173111.111111 take cash

Bank B gets cash 10013424.657534 return bonds

 .
ting Friday

Assets amount
cash on hand 75 solution
balances with RBI 510 Liabilties to other 5280
balances with banks
current account 70 liabilities to the 1400
deposits 460
money at call 75 NDTL 6075
investments 1490
advances 3750
fixed assets 685
other assets 200

TOTAL 7315

avg fortnight
daily basis
min CRR 225.72
short fall 25.72
borrowing over 334.36
amount to be m 3326.4
on 14th day 392.04
borrowing on 1 192.04
total borrowin 526.4

2275 2825
me from loan fund 423.75
73.125
25% of TI
662.5

227.5
65
 60

amount can be dispensed as intere 310

9.54%

face value 10000000

INTEREST RATE 7.60%

SEMI ANNUAL 380000

INTEREST 360 DAYS

REPO 365 DAYS

10186535.7686454

10000000

10187888.8888889
PROBLEM 4
A certificate of deposit with a face value of Rs.10,00,000 is issued at a disco
with a term of 6 months. CRR is 4.5% and stamp duty is 0.125% per quarter
bank and yield to the investor respectively ?

SOL yeild to investor 6.00%

cost to bank 6.28%

with stamp duty 6.53%

PROBLEM 5
On 01.04.2017, ABC Bank bought 7.25% Central Government security matu
price of Rs.98.50. The face value of the security is Rs.100. If the bank holds
what is the realized yield from the security?

SOL realized yield 8.88%

PROBLEM 6
A 91-day T-bill with a face value of Rs.100 is acquired in the auction at a yie
purchase price?
SOL 97.6863065209

PROBLEM 7
What is the issue price of a 90 day commercial paper with face value Rs 25

2439839.5721925 97.6863
s issued at a discount price of Rs.9,70,874
.125% per quarter. What is the cost to the

ent security maturing on 31.3.2018 at a

. If the bank holds the security till maturity,

864.5
he auction at a yield of 9.50%. What is the 37364.5
97.68631

h face value Rs 25 lakhs yielding 10%?