Ch 5: OPERATIONAL RISK AND OFF-BALANCE SHEET RISK — Study Material & Test Yourself

1(a): Operational Risk - Identification and Assessment, Basel Norms

5 Marks

With reference to the latest Institute Study Material curriculum for Risk Management in Banking and Insurance (CMA Final), critically examine the foundational principles, core concepts, and operational framework of 'Operational Risk - Identification and Assessment, Basel Norms'. Elucidate: (i) the primary statutory / regulatory basis; (ii) standard operating procedure and compliance requirements; and (iii) illustrative examples demonstrating practical application.

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1(b): Monitoring and Mitigating Operational Risk

5 Marks

Review the self-assessment and practical guidelines provided in the study material concerning 'Monitoring and Mitigating Operational Risk' under Risk Management in Banking and Insurance (CMA Final). Detail: (i) the substantive criteria and legal thresholds; (ii) the computational methodology and accounting/statutory adjustments; and (iii) the prescribed disclosures in statutory reporting.

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2(a): Off-Balance Sheet Risk Exposures

5 Marks

Based on the curriculum learning objectives of Risk Management in Banking and Insurance (CMA Final), analyze the statutory implications of 'Off-Balance Sheet Risk Exposures'. Specifically discuss: (i) governing legislative sections, rules, or standards; (ii) rights, liabilities, and duties of concerned parties; and (iii) penal consequences or regulatory remedies in case of default.

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2(b): Loan Commitments

5 Marks

Explain the analytical framework governing 'Loan Commitments' as elucidated in the study material of Risk Management in Banking and Insurance (CMA Final). Your answer must address: (i) key definitions and scope; (ii) statutory exceptions or safe harbor provisions; and (iii) best practice compliance measures.

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3(a): Commercial Letters of Credit, Letters of Undertaking and Bank Guarantee

5 Marks

With reference to the latest Institute Study Material curriculum for Risk Management in Banking and Insurance (CMA Final), critically examine the foundational principles, core concepts, and operational framework of 'Commercial Letters of Credit, Letters of Undertaking and Bank Guarantee'. Elucidate: (i) the primary statutory / regulatory basis; (ii) standard operating procedure and compliance requirements; and (iii) illustrative examples demonstrating practical application.

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3(b): Derivatives

5 Marks

Review the self-assessment and practical guidelines provided in the study material concerning 'Derivatives' under Risk Management in Banking and Insurance (CMA Final). Detail: (i) the substantive criteria and legal thresholds; (ii) the computational methodology and accounting/statutory adjustments; and (iii) the prescribed disclosures in statutory reporting.

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