JAIIB | AFM | LIABILITIES OF BANKS – CASE STUDY

Enhance your expertise with Learning Sessions in managing the Liabilities of Banks with our specialized JAIIB courses, designed to equip you with essential skills in risk management, liquidity control, and financial stability in the banking sector. This article on the case study will take you through the Liabilities of Banks that is fundamental to the Accounting and Financial Management (AFM) module of the JAIIB exam. 

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Bank liabilities refer to all the debts and obligations that a bank is legally required to settle. These can be broadly classified into:

-Deposits: The largest component of bank liabilities, including demand deposits (current accounts), time deposits (fixed deposits), and savings deposits.

-Borrowings: Loans taken by banks from other institutions, central banks, or international markets to manage liquidity or for operational purposes.

-Other Liabilities: This category includes various financial commitments, such as bonds, debentures, and liabilities arising from interbank transactions.

For the extensive preparation of candidates, get details through our YouTube videos for JAIIB AFM Module wise Syllabus with explanations and tips to help candidates in their preparation journey.

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For banks, considering liabilities is analytical for managing and ensuring that the bank has enough liquid assets to meet withdrawal demands. Maintaining a balanced liability structure helps banks meet regulatory capital requirements. Proper management of liabilities safeguards banks from default risk and ensures their financial health. Similarly, Deposits, Borrowings and Other Liabilities are the implications of these liabilities.

Taking everything into account, in the banking sector, liabilities are not merely obligations—they are strategic components of a bank’s financial management. By understanding and managing these liabilities effectively, banks can ensure they maintain a balance between risk, liquidity, and profitability. As part of the JAIIB AFM module, knowledge of bank liabilities equips candidates to make sound financial decisions that enhance both the institution’s stability and its long-term success. Learning Sessions provides additional information about JAIIB AFM CAPITAL STRUCTURE by giving examples of real life scenarios.

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