What is the significance of the Net Interest Margin (NIM) for a bank? Option: "It determines the bank's compliance with regulatory capital requirements", "It indicates the proportion of non-performing assets in the bank's portfolio", "It measures the profitability and efficiency of the bank's investment decisions", "It reflects the bank's ability to absorb sudden losses"

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What is the significance of the Net Interest Margin (NIM) for a bank?

"It determines the bank's compliance with regulatory capital requirements"

"It indicates the proportion of non-performing assets in the bank's portfolio"

"It measures the profitability and efficiency of the bank's investment decisions"

"It reflects the bank's ability to absorb sudden losses"

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What does a consistently narrowing Net Interest Margin (NIM) over several quarters potentially indicate about a bank?

"Increased profitability from lending activities"

"Declining fundamentals and creditworthiness"

"Improved financial health and creditworthiness"

"Greater efficiency in managing interest expenses"

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What is the term for the difference between the interest rate at which banks borrow money and the rate at which they lend it?

"Loan spread"

"Interest rate differential"

"Net interest margin"

"Profit margin"

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What metric does RBI primarily use to assess a bank's profitability under the PCA framework?

"Earnings Per Share (EPS)"

"Return on Assets (ROA)"

"Return on Equity (ROE)"

"Net Interest Margin (NIM)"

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Which of the following is NOT a key performance indicator used to analyze banks?

"Interest margins"

"Capital adequacy ratios"

"Non-performing assets (NPAs)"

"Revenue per seat kilometer"

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Which of the following is a key indicator of a bank's asset quality?

Return on Equity (ROE)

Gross Non-Performing Assets (GNPA) Ratio

Earnings per Share (EPS)

Price-to-Earnings (P/E) Ratio