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How to study for CAIIB

The need to write this article arises only because we observed that maximum times the students are saying or communicating that, they are finding difficult to clear the CAIIB papers or some are able to clear up one of the compulsory subject along with other elective paper but have ended up with marks in the range of 40 to 44 in other compulsory subject and hence the end result is fail, and this is happening again and again loosing the credit of passed subject….

Even, if you observe, in the failure list all around, the maximum failure students has got the marks in 40 to 49. Why this is happening? Why we are not getting more than 50?

The answer is here…

We are committing following certain mistakes repeatedly:

1. Not understanding the structure of course:CAIIB course is designed & intend to play a useful role in helping bank executives seeking specialization in the given verticals. CAIIB underlines the fact that current day banking requires general as well as domain specific knowledge. It is seen that, in the specialization era, a candidate who has worked under one vertical in a bank for several years and has expertise in that area may not be equally comfortable working in a new vertical unless the knowledge of the new vertical is made available in a professional manner. Such persons need an opportunity to learn the nuances of a new vertical. Also, a person working in a given area in banking needs to keep pace with the current developments; which given the work pressure may not be automatic. Post CAIIB, the mobility of personnel from one banking vertical to another should also be preceded by some knowledge inputs on the given area of banking.

2. Not understanding the structure of examination paper: Our papers are of three level. Easy, Moderate difficult and difficult. Easy portion is of around 25-35 marks, moderate difficult is of another 35 marks and rest is difficult. Easy portion & some portion of moderate difficult one, can be answered with some readings of the subject and also our experence in banking and knowledge acquired during bank working. However, we failed to go beyond that as we have not studied the subject in deep and hence our score remains in the range of 35 to 45 and not beyond.

3. We are looking for shortcuts in study. Like we are purchasing or searching for MCQ (multiple objective questions), with the thinking that some may come in exam and we will clear the subject.

4. We are not devoting time for study of subject in detail.

5. Some of us are having thinking that if we complete all questions (ticking with some guess work also) in examination then we will get atleast 50% correct, with sacrifice on correctness of multiple objective question…

How to overcome & get pass the exam?

  •      Visit the subject in detail with proper book or study material in hand..
  •     Always remember the concept and then go ahead with solving certain questions.
  •   Also do remember that examiner can set ‘n’ number of MCQ (multiple objective questions) on topics/subjects and if we are strong in concept then it is very easy to apply to solve such MCQ’s.
  •    Look out for study material/book which is comprehensive & easy to understand.
  •    If you want to refer multiple objective questions then search for those which of great quality and should be refer to only after studying the subject in detail..

Paper wise Preparation:

Paper 1: Advanced bank management:

This paper is basically challenging you on the front of Economics, Statistics, HR & Making & managing the advances. All these modules are different and cannot be integrated for study. We need to study them in isolation.

For Economics, importance is required to be given on macro economics like inflation, national income concept, use, how to calculate it and Budget concepts.  As regards budget concept, you need to know what is primary deficit, budgetary deficit, fiscal deficit etc. You also need to know, what is money supply? How RBI regulates it through monetary policy?

Statistics: This portion is actually need to visited as a practical one. The topics which are taken here is very useful to bank personnel in banking career. Like sampling tool, normal distribution, Time value of money etc.  Here, you should be able to know how these tools can be used to extract and predict the banking business development and provision of good services to customer in efficient way.

HR: human resource management refers to a set of programmes, functions and activities designed and carried out to maximize both, employee as well as organizational effectiveness. It is concerned with the people dimensions in the management. In the context of banking, human resource is of greater importance. The success of any bank largely depends on efficient human resource management, apart from operations, marketing and sales, the HR department manages all the efficient people working in operations and marketing divisions in any organization. There is a qualitative change in the banking paradigm on account of changes in the industry due to the opening of banking sector for new private sector Banks. Therefore, it has become a necessity to recruit, train and deploy people at all level efficiently, for better performance and success. The crucial factors behind successful banking will be continuous and sustained build up of skills, knowledge, education and attitudes among people working in the banks, particularly the frontline staff, working in the branches. It is possible through professionalization, which is an internal part of HRM. Bank staff should be motivated and encouraged to practice professionalism for their personal growth and thus contribute to the organization's growth.

It is also been argued that if you as a qualified in CAIIB knows HR in detail, you would be able run the bank efficiently and bank can grow to achieve its objective. And, hence HR in details has been given due weight in the CAIIB examination.

In Making & managing advances, focus should be given to lending norms, cash flow statement, calculations relating to working capital assessment and minimizing the risk of stress assets.

Paper 2: Bank Financial management:

This paper is exhaustive study of bank’s financial management taking us deep into various verticals of bank balance sheet.  The paper can be studied in six parts:

a. Foreign exchange market mechanism and management of its risk.

b. Issue related to trade in International business using banking products like, deposit products for NRI, LC, export finances, protection products by ECGC, etc.

c. Hedging products for FX (Forward, Futures, swaps etc) with rules of FEDAI.

d. Understanding of each bank balance sheet item relating to its risk and effect on financial health of bank. Further, extended to ALM, all three types of risk including interest risk and its effects on NIM.

e. Various treasury products available to be dealt by bank.

f. Management & maintenance of Regulatory capital i.e provisions of Basel.

Here, understanding of bank balance sheet is at prime. Because every item of bank balance sheet is associated with risk element which has having far reaching impact on bank’s financial health. 

No particular area can be given more weight but surely we should focus on key areas like, asset sensitivity, FX & deposit products available for NRI, hedging tools and its mechanism, various types of risks – identification measurement, and more importantly management of it. Over and above we should be very much familiar  with Basel norms.

Paper 3: Optional subject:

The student can choose any subject out of 11 according to its own assessment of strength in any of these subjects. You need to choose that subject wherein you are aware of its contents in depth and proper material is available for it…

We wish you all the best…..

Article Category - Banking

Posted Date - 2013/08/16