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Briefly explain interest rate risk related to financial institution with an example?

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Question added by Mohammad Nuruddin , Senior Executive Officer & Operation Manager , Jamuna Bank Limited
Date Posted: 2014/12/06
Mohammed Salim Allana
by Mohammed Salim Allana , Compliance and Assurance Manager , United Arab Bank

The FI have to manage Customer deposits and advances at different pricing and tenor. There are three categories non interest bearing, fixed interest rates and variable interest rates using Basel II guidelines banks have to ensure that they are not over exposed their balance sheet in long term with high volumes under variable interest rate risk (IRR)

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