Question

Which of the following best explains the “Asset-Liability Mismatch” risk faced by commercial banks?

• A. When assets and liabilities mature at different times leading to liquidity issues
• B. When loan recovery rate falls below deposit growth rate
• C. When banks fail to comply with RBI’s prudential norms
• D. When banks lend excessively to the government sector

Answer 1

Answer:

A. When assets and liabilities mature at different times leading to liquidity issues

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