CAIIB Bank Financial Management (BFM) Syllabus & Study Material 2024

Hey Bankers! Are you appearing in the CAIIB exam 2024? Looking for guidance in the CAIIB BFM paper? This article will cover the paper pattern, detailed syllabus, and study material to help you clear the exam in the first attempt.

caiib BFM paper 2024 syllabus & study material

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CAIIB Bank Financial Management (BFM) Paper Pattern

Number of questions -100 

Marks – 100  

Duration – 2 hour

CAIIB Syllabus: CAIIB Compulsory Subjects

Paper 1: Advanced Bank Management (ABM)

Paper 2: Bank Financial Management (BFM)

Paper 3: Advanced Business and Financial Management (ABFM)

Paper 4: Banking Regulations and Business Laws (BRBL)


CAIIB Syllabus: CAIIB Elective Subjects:
  1.   Rural Banking
  2.   Human Resources Management
  3.   Risk Management
  4.   Central Banking
  5.   Information Technology and Digital Banking

CAIIB Bank Financial Management (BFM) detailed syllabus

Module – A

Chapter Name



Exchange Rates and Forex Business

Foreign Exchange – Definition and Markets; Factors Determining Exchange Rates; Exchange Rate Mechanism; Foreign Exchange Dealing Room Operations; Derivative Products; RBI / FEDAI Guidelines; Foreign Exchange Arithmetic – Concepts and Examples.

Liberalised Remittance Scheme (LRS) and other Remittance Facilities for Residents

Capital Account Transactions and Current Account Transactions; Key Sections under FEMA vis-à-vis Liberalized Remittance Scheme; Permissible/Non-permissible Remittances under LRS; Operational Guidelines; Remittances under LRS for Current Account Transactions; Tax Collected at Source (TCS); LRS vis-à-vis Capital Account Transactions; Reporting Requirements under LRS.

Correspondent Banking and NRI Accounts

Correspondent Banking – Accounts and other Services; Nostro, Vostro and Loro Accounts; Electronic Modes of Transmission/Payment Gateways – SWIFT, CHIPS, CHAPS, RTGS, etc.; NRI Banking; NRI accounts – Rupee and Foreign Currency Accounts; Facilities to NRIs; Advances to Non-Residents against Non-Resident Deposits; Housing Loans to Non-Resident Indians.

Documentary Letters of Credit

Definition of Letter of Credit; Types of Letters of Credit; Operations of Letter of Credit; UCP 600 and Important Articles; Liabilities, Responsibilities and Rights of the Parties; Documents under LC – Scrutiny, Crystallization, Follow-up for Bills under LC and Safeguards for Banks; Risks Relating to LC Transactions; Standby Letter of Credit (Similar to Guarantees); Uniform Rules for Bank-to-Bank Reimbursements (URR–725); International Standard Banking Practice – 745 (ISBP 745); Incoterms; Case Studies

Facilities for Exporters and Importers

Exchange and Trade Control Guidelines for Exporters; Facilities for Exporters; Export Finance; Gold Card Scheme for Exporters; Export Data Processing and Monitoring System (EDPMS); Factoring and Forfaiting; Exchange and Trade Control Guidelines for Importers; Import Finance; Import Data Processing and Monitoring System (IDPMS); Trade Credit – Supplier’s Credit and Buyer’s Credit; Case Study on Export Finance.

External Commercial Borrowings and Foreign Investments in India

External Commercial Borrowings – Concepts; ECBs – Other Operational Concepts; Reporting Requirements; Conversion of ECB into Equity; Foreign Investments; Key Concepts; Eligible Foreign Investors; Eligible Investee Entities; Eligible Investment Instruments; Prohibited Sectors; Rules Governing Pledge of Shares; Operational Guidelines; Snap Shot of Non-Debt Instruments (NDI) Rules; List of Documents for Obtention of Foreign Investments; List of Documents for Refund of Foreign Investments Risks in Foreign Trade – Role of ECGC Definition of Risk and Risks in International Trade; Country Risk; Export Credit Insurance in International Trade; ECGC Role and Products; ECGC Policies; ECGC’s Products for Banks; Other Aspects Relating to ECGC Policies and Guarantees; Some of the Common “To Do Points” under ECGC Policies; Claims.

Role of EXIM Bank, Reserve Bank of India, Exchange Control in India – FEMA, FEDAI and Others

EXIM Bank – Role, Functions and Facilities; Reserve Bank of India – Role and Exchange Control Regulations in India; Foreign Exchange Management Act (FEMA) 1999; Role of FEDAI and FEDAI Rules; Short Notes on Other Topics: ECB and ADR/GDRs and FCCB.

International Financial Service Centres (IFSC), GIFTCity


Scope of IFSC in India; Opportunities at Gift City; Guidelines relating to setting up of IFSC Banking Units (IBUs); Role of IFSCA ; Regulatory Framework; Permissible Activities at IBUs; Relaxations for the FPI (Foreign Portfolio Investors) Entities at GIFT City.

Technology in International Banking

Introduction to Digitization in International Banking – An Overview, Evolution of Technology in International Banking; Benefits and Limitations of Technology in International Banking; Digital Platforms in International Banking; FINTECH and Evolution of FINTECH in International Banking; Delivery channels under FINTECH in International Banking; Sample process of International Trade Using Blockchain Technology; Challenges in FINTECH


Module B

Chapter Name



Risk and Basic Risk Management Framework

What is Risk, Linkages among Risk, Capital and Return; Why Risk Management; Basic Risk Management Framework.

Risks in Banking Business

Risk Identification in Banking Business; The Banking Book; The Trading Book; Off-Balance Sheet Exposures; Banking Risks – Definitions.

Risk Regulations in the Banking Industry

Regulation of Banking Industries – Necessities and Goals; The Need for Risk-based Regulation in a Changed World Environment; Basel I: The Basel Capital Accord; 1996 Amendment to Include Market Risk; Basel II Accord – Need and Goals; Basel II Accord; Towards Basel III; Capital Charge for Credit Risk; Credit Risk Mitigation; Capital Charge for Market Risk; Capital Charge for Operational Risk; Pillar 2 – Supervisory Review Process; Pillar 3 – Market Discipline; Capital Conservation Buffer; Leverage Ratio; Countercyclical Capital Buffer; Systemically Important Financial Institutions (SIFIs); Risk Based Supervision (RBS).

Market Risk

Market Risk – Concept; Market Risk in Banks; Market Risk Management Framework; Organisation Structure; Risk Identification; Risk Measurement; Risk Monitoring and Control; Risk Reporting; Managing Trading Liquidity; Risk Mitigation.

Credit Risk

General; Credit Risk Management Framework; Organisation Structure; Risk Identification; Risk Measurement; Credit Risk Control and Monitoring; Credit Risk Policies and Guidelines at Transaction Level; Credit Control and Monitoring at Portfolio Level; Active Credit Portfolio Management; Controlling Credit Risk through Loan Review Mechanism (LRM); Credit Risk Mitigation; Securitisation; Credit Derivatives (CDs).

Operational Risk and Integrated Risk Management

Operational Risk – General; Operational Risk – Classification; Operational Risk Classification by Event Type – Definitions; Operational Risk Management Practices; Management Overview and Organisational Structure; Processes and Framework; Risk Monitoring and Control Practices; Operational Risk Qualification; Operational Risk Mitigation; Scenario Analysis; Integrated Risk Management; The Necessity of Integrated Risk Management; Integrated Risk Management – Challenges; Integrated Risk Management – Approach.

Liquidity Risk Management

Liquidity Risk Management – Need & Importance; Potential Liquidity Risk Drivers; Types of Liquidity Risk; Principles for Sound Liquidity Risk Management; Governance of Liquidity Risk Management; Liquidity Risk Management Policy, Strategies and Practices; Management of Liquidity Risk; Ratios in respect of Liquidity Risk Management; Stress Testing; Contingency Funding Plan; Overseas Operations of the Indian Banks’ Branches and Subsidiaries and Branches of Foreign Banks in India; Broad Norms in Respect Of Liquidity Management; Liquidity Across Currencies; Management Information System; Reporting to the Reserve Bank of India; Internal Controls.

Basel III Framework on Liquidity Standards

Liquidity Coverage Ratio; Liquidity Risk Monitoring Tools; Net Stable Funding Ratio.


Module C

Chapter Name



Introduction to Treasury Management

The Concept; Functions of Integrated Treasury; The Process of Globalisation; Evolving Role of Treasury as Profit Centre; Organisation of Treasury.

Treasury Products

Products of Foreign Exchange Markets; Money Market Products; Securities Market Products; Domestic and Global Markets.

International Equity and Debt Products

Regulatory Environment; Global Depository Receipts; Indian Depository Receipts; External Commercial Borrowings; Trade Credits; Rupee Denominated Bonds.

Funding and Regulatory Aspects

Reserve Assets: CRR and SLR; The Liquidity Adjustment Facility (LAF); Payment and Settlement Systems.

Treasury Risk Management

Supervision and Control of Treasury; Market Risk and Credit Risk; Risk Measures: VaR and Duration; Use of Derivatives in Risk Management.

Derivative Products

Derivatives and the Treasury; OTC and Exchange Traded Products; Forwards, Options, Futures and Swaps; Interest Rate and Currency Swaps; Developments in Indian Markets and RBI Guidelines on Risk Exposure.

Treasury and Asset-Liability Management

Meaning of Asset-Liability Management (ALM), Liquidity Risk and Interest Rate Risk, Role of treasury in ALM, Use of derivatives in ALM, Credit risks and Credit Derivatives, Transfer pricing, Policy Environment.


Module D

Chapter Name


Components of Assets and Liabilities in Bank’s Balance Sheet and their Management

Components of a Bank’s Balance Sheet; What is Asset Liability Management, Significance of Asset Liability Management; Purpose and Objectives of Asset Liability Management; ALM as Co-ordinated Balance Sheet Management.

Capital Adequacy – Basel Norms

Scope of Application; Pillar-1 – Minimum Capital Requirements; Pillar 2- Supervisory Review Process; Pillar 3 – Market Discipline.

Asset Classification and Provisioning Norms

Asset Classification; Provisioning Norms

Liquidity Management

Definition; Dimensions and Role of Liquidity Risk Management; Measuring and Managing Liquidity Risk.

Interest Rate Risk Management

Essentials of Interest Rate Risk; Sources of Interest Rate Risk; Effects of Interest Rate Risk; Measurement of Interest Rate Risk; Interest Rate Risk Measurement Techniques; Strategies for Controlling Interest Rate Risk; Controls and Supervision of Interest Rate Risk Management; Sound Interest Rate Risk Management Practices; RBI’s Draft Guidelines on Interest Rate Risk in Banking Book

RAROC and Profit Planning

Profit Planning; Risk Aggregation and Capital Allocation; Economic Capital and RAROC


CAIIB BFM Study Material by Learning Sessions

Learning Sessions provide CAIIB Online mock tests, Module-wise practice papers, Previous year papers, Epdfs, and recollected Questions all with updated syllabus as per IIBF. Study material is designed for the ease of the candidates to help to crack the paper in the first attempt. In addition, videos on different topics of CAIIB BFM are uploaded daily on our YouTube channel. Candidates are recommended to follow those videos in preparation for the exam.

  1. CAIIB BFM Syllabus Priority

Check our CAIIB BFM syllabus priority video prepared by our expert to help to understand the high-weightage modules, important topics, how to cover case studies, numerical section and day-wise strategy to cover the syllabus.

2. CAIIB BFM Memory Recollected Questions

While preparing for the CAIIB exam, memory-recollected questions are extremely helpful for exam pattern understanding, assessing important topics, improving time management, and identifying your weak and strong areas.

3. CAIIB BFM Epdfs

Our CAIIB BFM Epdfs are designed in a way to make the concepts and topics easily understandable by candidates.

So, with thorough preparation and a strategic approach, success in the first attempt of the CAIIB BFM paper is within your reach. Remember consistency and dedication are the keys to CAIIB certification. For any support in the preparation of the CAIIB BFM paper WhatsApp us, our experts are always ready to help you.

CAIIB BFM Memory Recollected Questions

S. No




Answers with explanation



What is the adjusted gap in re-pricing assets and liabilities?

a. 100 Cr
b. 120 Cr
c. 140 Cr
d. 160 Cr

Ans – a

Adjusted gap :


= (SB+FD) – (Call money+CC)
= (500 + 500) – (500 + 400)
= Rs.100cr (assets are less than liabilities. Hence negative gap).

* The cash in hand and current account deposits are not subject to re-pricing, Hence these have been ignored.


Calculate the amount of repricing assets as per the standard gap method in repricing assets and liabilities.

a. 300 Cr
b. 450 Cr
c. 650 Cr
d. 800 Cr

Ans – c

Call money 500 * 50% = Rs.250cr + Cash credit 400 * 100% = 400cr Total = 650cr


Calculate the amount of repricing liabilities as per the standard gap method in repricing assets and liabilities.

a. 300 Cr
b. 450 Cr
c. 650 Cr
d. 800 Cr

Ans – b

SB 500 * 10% = 50cr + FD 500 * 80% = 400cr Total = 450cr


In which type of accounts of NRI, a joint account can be opened with residents?

b. NRE
c. NRO
d. Any of the above

Ans – c


A derivatives contract cannot exist without an

a. Exchange
b. Underlying be it equity, interest rate etc.
c. increase in volatility
d. increase in arbitrage

Ans – b


Click here for more memory-recalled questions



Q1. What is the CAIIB BFM?

The CAIIB BFM paper is compulsory paper 2 of the CAIIB exam.

Q2. What is the validity of the CAIIB certification?

The CAIIB certification is valid for a lifetime once obtained. There is no expiration date for the CAIIB certification.

Q3. What are the CAIIB BFM Paper dates in 2024?

The exam dates of CAIIB ABM are-

13th July 2024 and 01st December 2024

Q4. How many modules are in the CAIIB BFM paper?

There are 4 modules in the CAIIB BFM paper-

Module A: International Banking

Module B: Risk Management

Module C: Treasury Management

Module D: Balance Sheet Management

Q.5 Which Module has more weightage in the CAIIB BFM Exam 2024?

Module B is the most important.

Q6. Which topics are covered in the CAIIB BFM paper?

Foreign Exchange, Capital Account Transactions and Current Account Transactions, Letter of Credit, Exchange and Trade Control Guidelines for Exporters, Regulation of Banking Industries, Market Risk, Liquidity Risk Management, Derivatives, Components of a Bank’s Balance Sheet, Provisioning Norms etc are some of the topics covered in the CAIIB BFM paper.

Q7. Is there any negative marking in the CAIIB BFM Paper 2024?

No there is no negative marking in the CAIIB BFM paper.

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