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CA IPCC Banking Chapter Applicable Rates May 2016


CA IPCC Banking Chapter Applicable Rates May 2016, CA IPCC Advance Accounting Banking Chapter Applicable rates May 2016. Hi Friends here we are providing complete details for applicable rates for CA IPCC May 2016 Exams like – What is the present Capital Adequacy Ratio, What is the present SLR Ratio for May 2016 Exams, What is the present CRR Ratio, Rates of Provisioning for Non-Performing Assets etc. Now you can scroll down below and check complete details for CA IPCC Banking Chapter Applicable Rates May 2016

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CA IPCC Banking Chapter Applicable Rates May 2016

Maintenance of Statutory Liquidity Ratio (SLR)

As per Notification No. DBOD No.Ret. BC.70/12.02.001/2014-15 dated February 3, 2015, the SLR of Scheduled Commercial Banks, Local Area Banks and Regional Rural Banks should not be less than 21.5% of its demand and time liabilities with effect from the fortnight beginning February 7, 2015.CA IPCC Latest Amendments

Simple Language – Applicable Rate of SLR is 21.5%

Maintenance of Cash Reserve Ratio (CRR)

Reserve Bank of India has decided to reduce the Cash Reserve Ratio (CRR) of Scheduled Commercial Banks by 25 basis points from 4.25 per cent to 4.00 per cent of their Net Demand and Time Liabilities (NDTL) with effect from the fortnight beginning February 09, 2013 vide circular DBOD.No.Ret.BC.76/ 12.01.001/2012-13 dated January 29, 2013. The Local Area Banks shall also maintain CRR at 3.00 per cent of its net demand and time liabilities up to February 08, 2013 and 4.00 per cent of its net demand and time liabilities from the fortnight beginning from February 09, 2013.

Simple Language – Applicable Rate of CRR is 4%

SLR Holdings under Held to Maturity Category

In order to further develop the government securities market and enhance liquidity, it has been decided to bring down the ceiling on SLR securities under the HTM category from 24 per cent of NDTL to 22 per cent* in a graduated manner. Accordingly it is advised that: Banks are permitted to exceed the limit of 25 per cent of total investments under HTM category provided:

  • the excess comprises only of SLR securities, and
  • the total SLR securities held in the HTM category is not more than 23.50 per cent with effect from January 10, 2015, 23.0 per cent with effect from April 4, 2015, 22.5 per cent with effect from July 11, 2015 and 22.0 per cent with effect from September 19, 2015, of their DTL as on the last Friday of the second preceding fortnight.

* As per DBOD.No.BP.BC.42/21.04.141/2014-15 dated 7 October, 2014.

Reserve Funds (Section 17)

Every banking company incorporated in India is required to create a Reserve Fund and to transfer at least 25% of its profit to the reserve fund. The profit of the year as per the profit and loss account prepared under Section 29 is to be taken as base for the purpose of such transfer and transfer to reserve fund should be made before declaration of any dividend.

If any banking company makes any appropriation from the reserve fund or share premium account, it has to report to the Reserve Bank of India the reasons for such appropriation within 21 days.

Note: Students shall ensure that 25% of the profit earned during current year is transferred as Statutory Reserve even if the question is silent on the issue in the examination question.

Capital Adequacy Ratio (CAR)

Every bank should maintain a minimum capital adequacy ratio based on capital funds and risk assets. As per the prudential norms, all Indian scheduled commercial banks (excluding regional rural banks) as well as foreign banks operating in India are required to maintain capital adequacy ratio (or capital to Risk Weighted Assets Ratio) which is specified by RBI from time to time. At present capital adequacy ratio is 9%.

Rates of Provisioning for Non-Performing Assets

Category of Advances Revised Rate (%)
Standard Advances
(a) direct advances to agricultural and SME 0.25
(b) advances to Commercial Real Estate (CRE) Sector 1.00
(C) all other loans and advances not included in (a) and (b) above 0.40
Sub- standard Advances
• Secured Exposures 15
• Unsecured Exposures 25
• Unsecured Exposures in respect of Infrastructure loan accounts where certain safeguards such as escrow accounts are available 20
Doubtful Advances – Unsecured Portion 100
Doubtful Advances – Secured Portion
• For Doubtful upto 1 year 25
• For Doubtful > 1 year and upto 3 years 40
• For Doubtful > 3 years 100
Loss Advances 100

Risk Weights %

Sr. No. Item of asset or liability Risk Weight %
I. Balances
1. Cash, balances with RBI 0
2. i. Balances in current account with other banks 20
ii. Claims on Bank 20
II Investments (Applicable to securities held in HTM)
1. Investments in Government Securities. 0
2. Investments in other approved securities guaranteed by Central!  State Government.

Note: If the repayment of principal I interest in respect of State Government Guaranteed securities included in item 2, 4 and 6 has remained in default, for a period of more than 90 days banks should assign 100% risk weight. However the banks need to assign 100% risk weight only on those State Government guaranteed securities issued by the defaulting entities and not on all the securities issued or guaranteed by that State Government.

3. Investments in other securities where payment of interest and repayment of principal are guaranteed by Central Govt. (This will include investments in Indira/Kisan Vikas Patra (IVP/KVP) and investments in Bonds and Debentures where payment of interest and principal is guaranteed by Central Govt.) 0
4 Investments in other securities where payment of interest and repayment of principal are guaranteed by State Governments. 0
5 Investments in other approved securities where payment of interest and repayment of principal are not guaranteed by Central/State Govt. 20
6 Investments in Government guaranteed securities of Government Undertakings which do not form part of the approved market borrowing programme 20
7 Claims on commercial banks.

Note: The exposure of Indian branches of foreign banks, guaranteed/ counter-guaranteed by overseas Head Offices or the bank’s branch in other country, would amount to a claim on the parent foreign bank and the risk weight of such exposure would depend upon the rating (assigned by the international rating agencies) of the overseas parent of the Indian branch.

8 Investments in bonds issued by other banks 20

For all  Updates and Amendments applicable for may 2016, Please download below latest Study Material File for Banking chapter applicable for May 2016

Download Banking Chapter Study Material Relevant for May 2016

Dear Friend Due to Very big list we provide all Risk Weights in PDF Format Please download Below PDF For all latest Risk Weights applicable for Nov 2015 Exams

Click Here to Download Complete List

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Article by Raju Choudhary Raju has written 537 articles. If you like This post, you can follow CAknowledge on Twitter. Subscribe to CAknowledge feed via RSS or EMAIL to receive instant updates.


  1. Thanks 4 such a useful information

  2. Are you sure that RRBs have to maintain both CRR and SLR ? Sorry for my question but I am too confused.Please tell me.

  3. Thanks a lot bro!!! for sharing such a valuable suggestion with all,
    due to negligence or ignorance of ICAI study material our hardworking frnds may no get the Results they deserve.

    again Thank You Very Much

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