Banking Digest

  In mortgage execution proceedings under the Artha Rin Adalat framework, when a secured property is sold through court auction, the entire purchase price deposited by the buyer is first applied toward satisfying the claims of the decree-holder bank. The borrower does not automatically receive any portion of the sale proceeds unless a surplus remains after all legally recoverable deductions have been made. This reflects a core legal principle: priority of institutional recovery over borrower entitlement . How Auction Sale Proceeds Are Distributed From the purchaser’s deposited amount, the first and most significant deduction is the bank’s total outstanding dues. This includes the principal loan, accrued interest up to the date of auction, and any applicable penal or default charges. Once the bank’s dues are adjusted, the court proceeds to deduct auction-related expenses. These include costs incurred for publishing sale notices in newspapers, property valuation, and administrativ...

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  Answers to 7th Banking Professional Examination, 2026 Subject: Risk Management in Financial Institutions (RMFI) Part A—Broad Questions Question 1(a): "Risk and return are the two sides of the same coin"—Explain. [8 marks] Risk and return are fundamentally interconnected in banking and finance. This relationship can be explained as follows: Definition of Risk and Return: Risk represents uncertainties resulting in adverse outcomes relative to planned objectives or expectations Return represents the reward or profit earned from taking on risk The Coin Analogy: Like two sides of a coin that cannot exist separately, risk and return are inseparable: Higher Risk, Higher Return : Banks that take greater risks can potentially earn higher returns. For example, lending to riskier borrowers at higher interest rates offers attractive revenues but carries higher potential losses. Lower Risk, Lower Return : Prudent banks that limit risks by restricting ...

Part A: Broad Questions (20 Marks) Strategy: Answer any 2 out of 4. Prepare at least 5 topics. Highest Priority (Asked 4+ Times) 1. Balance of Payment (BOP): Components, BOT vs BOP difference, Causes of deficit in Bangladesh and remedies. 2. Letter of Credit (LC): Operational procedure (Flow chart), Roles, rights, and liabilities of parties. 3. Back to Back (BTB) LC: Definition, Advantages/Disadvantages, Precautions for banks. 4. Export Problems of Bangladesh: Problems in export trade and probable solutions. 5. Domestic vs International Trade: Compare & Contrast, Importance of International Trade. High Priority (Hot Topics from New Syllabus) 1. Service Export / Freelancing: Challenges and prospects of service export (ICT, Freelancing). 2. Capital Flight & Black Money: Causes of capital flight from Bangladesh and prevention suggestions. 3. Counter Trade: How it helps countries with low forex reserves, Regulations for Bangladesh. 4. Open Account Shift: Bangladesh's preparatio...

Basel II and Basel III are international banking standards developed to strengthen the stability and risk management of the global financial system. Basel II focused mainly on improving how banks measure and manage credit, market, and operational risks, while Basel III was introduced after the 2008 financial crisis to further strengthen capital quality, liquidity buffers, and overall bank resilience.  Easy techniques to remember -  Basel II vs Basel III  in IBB or any competitive exam:  🔸 Basel II → “RISK” R – Risk-based capital (8%) I – Internal assessment (banks measure their own risk) S – Supervision (regulator review) K – Keep market discipline (disclosure) 👉 Focus: Measure Credit, Market, Operational risk 👉 Given by Basel Committee on Banking Supervision 🔸 Basel III → “SAFE BANK" S – Strong capital (CET1) A – Additional buffers (2.5% + countercyclical) F – Funding stability (NSFR) E – Emergency liquidity (LCR) B – Borrowing limit (Lev...

In the world of lending, one question always matters most: Will the borrower repay the loan? To answer this, financial institutions rely on a well-established framework known as the 5 C’s of Credit . Whether you are a banker assessing loan applications, a student learning credit fundamentals, or a borrower seeking financing, understanding these five factors is essential. 1. Character – The Borrower’s Trustworthiness Character reflects the borrower’s integrity, honesty, and repayment behavior . Banks assess this through: CIB report Past loan repayment history Market reputation Real Scenario (Bangladesh Context): A trader in Narayanganj applies for a working capital loan. His financials look average, but his CIB report shows no default history , and he has maintained good relationships with previous banks. 👉 The bank approves the loan mainly due to strong character , despite moderate income. 2. Capacity – Ability to Repay Capacity measures whether the borrower has enough ca...