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    Question

    Expand CAMELS as one of the rating systems used by RBI

    A Capital adequacy, asset quality, management, earning quality, leverage, sensitivity to market risk Correct Answer Incorrect Answer
    B Capital Structure, asset quality, management, earning quality, leverage, sensitivity to market risk Correct Answer Incorrect Answer
    C Capital adequacy, asset quality, management, earning quality, liquidity, sensitivity to market risk Correct Answer Incorrect Answer
    D Capital adequacy, asset quality, management, earning quality, liquidity, sensitivity to operation risk Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    CAMEL was recommended as a tool for RBI to measure the financial soundness of the banks in 1988. The sixth component sensitivity to market risk was added in 1997. It is:   Capital adequacy, asset quality, management, earning quality, liquidity, sensitivity to market risk

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