CAIIB ABM Formulas Cheat Sheet 2026 — All Modules, One Page
Quick Answer: This is the complete CAIIB ABM formula reference for all 4 modules — Statistics (Module A), Credit Management (Module C), Basel & Compliance (Module D), and HRM (Module B). Bookmark this page. Print the tables. Review the key formulas daily for the last 2 weeks before your exam.
CAIIB ABM Formulas Cheat Sheet 2026 — All Modules, One Page
ABM has formulas across three of its four modules. Module A (Statistics) has the most — 15+ formulas in regular rotation. Module C (Credit Management) has the highest-stakes formulas — DSCR and MPBF directly determine whether a borrower gets a loan, and IIBF tests them in every exam. Module D (Basel) has 8–10 ratios that must be known cold. Module B (HRM) is almost entirely conceptual.
Use this page in two ways: as a daily review reference during preparation, and as a last-day revision sheet before the exam.
Module A — Statistics Formulas
A1 — Measures of Central Tendency
| Measure | Formula | Key Point |
|---|---|---|
| Arithmetic Mean | X̄ = Σx / n | Most affected by extreme values |
| Weighted Mean | X̄w = Σ(w·x) / Σw | Use when values have different weights |
| Median | Middle value (sorted data) | Best for skewed distributions |
| Mode (empirical) | 3·Median − 2·Mean | Use when mode unknown; Mean & Median given |
| Geometric Mean | GM = (x₁·x₂·…·xₙ)^(1/n) | Used for growth rates and index numbers |
A2 — Measures of Dispersion
| Measure | Formula | Key Point |
|---|---|---|
| Range | Max − Min | Simplest; highly sensitive to outliers |
| Variance | σ² = Σ(x − X̄)² / n | Average squared deviation from mean |
| Standard Deviation | σ = √[Σ(x − X̄)² / n] | Same unit as data; most used dispersion measure |
| Coefficient of Variation | CV = (σ / X̄) × 100 | Relative dispersion — compare across datasets |
| Mean Deviation | MD = Σ|x − X̄| / n | Average absolute deviation (less common in IIBF) |
A3 — Correlation
| Type | Formula | Use When |
|---|---|---|
| Pearson’s r | r = Σ(x−X̄)(y−Ȳ) / (n·σx·σy) | Both variables are continuous/numeric |
| Spearman’s rₛ | rₛ = 1 − 6Σd² / n(n²−1) | Ranks or ordinal data; d = rank difference |
| Coefficient of Determination | r² | % of variation in Y explained by X |
| r from regression coefficients | r = √(byx × bxy) | When both regression coefficients are given |
r interpretation: +1 = perfect positive · −1 = perfect negative · 0 = no correlation · |r| > 0.7 = strong · 0.3–0.7 = moderate · <0.3 = weak
A4 — Regression
| Item | Formula | Notes |
|---|---|---|
| Regression of Y on X | Y = a + bX | Predict Y from X |
| Slope b (Y on X) | byx = r × (σy / σx) | Find b first, then a |
| Intercept a | a = Ȳ − byx·X̄ | Always find b before a |
| Slope b (X on Y) | bxy = r × (σx / σy) | For regression X = a + bY |
| Alternative b formula | b = [n·Σxy − Σx·Σy] / [n·Σx² − (Σx)²] | Use when raw data is given (no r, σ) |
| Both regression lines meet at | (X̄, Ȳ) | Regression lines always intersect at means |
A5 — Probability
| Rule | Formula | When to Use |
|---|---|---|
| Addition (general) | P(A∪B) = P(A)+P(B)−P(A∩B) | “Or” — events can overlap |
| Addition (mutually exclusive) | P(A∪B) = P(A) + P(B) | “Or” — events cannot occur together |
| Multiplication (independent) | P(A∩B) = P(A) × P(B) | “And” — events are independent |
| Multiplication (dependent) | P(A∩B) = P(A) × P(B|A) | “And” — events are dependent |
| Conditional Probability | P(A|B) = P(A∩B) / P(B) | Probability of A given B occurred |
| Bayes’ Theorem | P(A|B) = P(B|A)·P(A) / [P(B|A)·P(A) + P(B|Ā)·P(Ā)] | Reverse conditional; update prior probability |
| Complement | P(Ā) = 1 − P(A) | Probability of event NOT occurring |
A6 — Index Numbers
| Index | Formula | Weights Used |
|---|---|---|
| Simple Price Index | (P₁ / P₀) × 100 | Single commodity |
| Laspeyres (L) | Σ(P₁·Q₀) / Σ(P₀·Q₀) × 100 | Base-year quantities Q₀ |
| Paasche (P) | Σ(P₁·Q₁) / Σ(P₀·Q₁) × 100 | Current-year quantities Q₁ |
| Fisher’s Ideal (F) | √(L × P) | Geometric mean of L and P |
| Marshall-Edgeworth | Σ(P₁·(Q₀+Q₁)) / Σ(P₀·(Q₀+Q₁)) × 100 | Average of base & current year quantities |
A7 — Sampling
| Measure | Formula | Notes |
|---|---|---|
| Standard Error (mean) | SE = σ / √n | Decreases as sample size increases |
| 95% Confidence Interval | X̄ ± 1.96 × SE | z = 1.96 at 95%; z = 2.58 at 99% |
| Sample size for mean | n = (z·σ / E)² | E = acceptable margin of error |
Module C — Credit Management Formulas
C1 — DSCR (Debt Service Coverage Ratio)
Standard DSCR Formula
DSCR = (Net Profit After Tax
+ Depreciation + Interest)
÷ (Loan Installment + Interest)
+ Depreciation + Interest)
÷ (Loan Installment + Interest)
Minimum acceptable DSCR: 1.25–1.50 (varies by bank policy)
Alternative Form
DSCR = Cash Accruals
÷ Debt Service
Cash Accruals = PAT + Depreciation
÷ Debt Service
Cash Accruals = PAT + Depreciation
IIBF uses both forms — recognise either presentation
C2 — Working Capital — MPBF (Tandon Committee)
| Method | MPBF Formula | Borrower’s Min. Margin |
|---|---|---|
| Method I | 75% × (CA − CL excl. bank borrowing) | 25% of WCG (CA−CL) |
| Method II | 75% × CA − CL excl. bank borrowing | 25% of Total CA (more stringent) |
| Method III | 75% × CCA − CL excl. bank borrowing | 25% of Core CA (most restrictive) |
Key definitions: CA = Current Assets · CL = Current Liabilities (excluding bank borrowings) · WCG = CA − CL · CCA = Core Current Assets · Method II gives lower MPBF than Method I (borrower must bring higher own funds)
C3 — Nayak Committee (MSME / Turnover Method)
WC Requirement = 25% of Turnover
Total working capital needed
MPBF = 20% of Annual Turnover
Bank’s maximum permissible finance
Borrower’s Margin = 5% of Turnover
Minimum own contribution
C4 — Drawing Power (Cash Credit / OD Accounts)
DP = (Value of Stock × (1 − Margin on Stock%))
+ (Value of Book Debts × (1 − Margin on BD%))
− Creditors (Trade Creditors)
Typical margin on stock: 25–35%
Typical margin on book debts: 30–40%
DP cannot exceed sanctioned limit
Recalculated monthly from stock statements
C5 — NPA Provisioning Norms
| NPA Category | Period | Secured Provision | Unsecured Provision |
|---|---|---|---|
| Sub-Standard | Up to 12 months as NPA | 15% | 25% |
| Doubtful D1 | 1–2 years as NPA | 25% | 100% |
| Doubtful D2 | 2–3 years as NPA | 40% | 100% |
| Doubtful D3 | > 3 years as NPA | 100% | 100% |
| Loss Assets | Identified as loss | 100% | 100% |
C6 — Key Credit Ratios
| Ratio | Formula | Benchmark |
|---|---|---|
| Current Ratio | Current Assets / Current Liabilities | Min 1.33 (Method II MPBF) |
| Debt-Equity Ratio | Total Debt / Tangible Net Worth | Typically < 3:1 for term loans |
| TOL/TNW | Total Outside Liabilities / Tangible Net Worth | Measures overall leverage; lower is better |
| Gross Profit Margin | (Gross Profit / Net Sales) × 100 | Compare with industry average |
| Net Profit Margin | (Net Profit / Net Sales) × 100 | Viability indicator for term loan |
| Stock Turnover | Net Sales / Average Inventory | Higher = faster inventory movement |
| Debtors Turnover | Net Sales / Average Debtors | Higher = faster collection |
| Debt Service Coverage | (PAT + Dep + Int) / (Installment + Int) | Min 1.25–1.50 |
Module D — Basel & Banking Ratios
D1 — Capital Adequacy (Basel III)
| Ratio | Formula | Minimum (India) |
|---|---|---|
| CRAR (Capital to RWA) | (Tier I + Tier II) / RWA × 100 | 11.5% |
| Tier I Capital Ratio | Tier I Capital / RWA × 100 | 9.5% |
| CET1 Ratio | Common Equity Tier I / RWA × 100 | 8% |
| Leverage Ratio | Tier I Capital / Total Exposure | ≥ 4% |
| Capital Conservation Buffer | Additional CET1 above minimum | 2.5% |
D2 — Liquidity Ratios (Basel III)
| Ratio | Formula | Minimum | Purpose |
|---|---|---|---|
| LCR | HQLA / Net Cash Outflows (30-day) | 100% | Short-term (30-day) liquidity stress |
| NSFR | Available Stable Funding / Required Stable Funding | 100% | Structural liquidity over 1 year |
D3 — Bank Performance Ratios
| Ratio | Formula | What it Measures |
|---|---|---|
| ROA | (Net Profit / Total Assets) × 100 | Efficiency of asset utilisation |
| ROE | (Net Profit / Shareholders’ Equity) × 100 | Return to equity holders |
| NIM | (Net Interest Income / Avg Earning Assets) × 100 | Core banking profitability |
| Cost-to-Income Ratio | (Operating Expenses / Net Income) × 100 | Operational efficiency; lower is better |
| Gross NPA Ratio | (Gross NPA / Gross Advances) × 100 | Asset quality — lower is better |
| Net NPA Ratio | (Net NPA / Net Advances) × 100 | NPA net of provisions |
| Credit-Deposit Ratio (CD) | (Total Advances / Total Deposits) × 100 | Lending efficiency; RBI monitors this |
| Business per Employee | (Deposits + Advances) / No. of Employees | Staff productivity |
Module B — HRM Key Frameworks (Not Formulas — Concepts)
Motivation Theories — Know These 5
- Maslow: 5-level hierarchy (physiological → self-actualisation)
- Herzberg: Hygiene factors vs Motivators
- McGregor: Theory X (authoritarian) vs Theory Y (participative)
- McClelland: Achievement, Power, Affiliation needs
- Vroom: Expectancy × Instrumentality × Valence
Performance Appraisal Methods
- MBO: Management by Objectives
- 360°: Multi-rater feedback
- BARS: Behaviourally Anchored Rating Scale
- Ranking: Simple vs paired comparison
- Critical Incident: Record of key behaviours
Leadership Styles
- Autocratic: Leader decides alone
- Democratic/Participative: Team input
- Laissez-faire: Full autonomy to team
- Transformational: Inspire long-term change
- Transactional: Reward/punishment system
All ABM Formulas — One Reference Table
| Formula Name | Expression | Module |
|---|---|---|
| Arithmetic Mean | Σx / n | A |
| Mode (empirical) | 3·Median − 2·Mean | A |
| Standard Deviation | √[Σ(x−X̄)²/n] | A |
| Coefficient of Variation | (σ / X̄) × 100 | A |
| Pearson’s r | Σ(x−X̄)(y−Ȳ) / (n·σx·σy) | A |
| Spearman’s rₛ | 1 − 6Σd² / n(n²−1) | A |
| Regression slope (b) | r × (σy / σx) | A |
| Regression intercept (a) | Ȳ − b·X̄ | A |
| Addition Rule P(A∪B) | P(A)+P(B)−P(A∩B) | A |
| Conditional P(A|B) | P(A∩B) / P(B) | A |
| Laspeyres Index | Σ(P₁Q₀)/Σ(P₀Q₀) × 100 | A |
| Paasche Index | Σ(P₁Q₁)/Σ(P₀Q₁) × 100 | A |
| Fisher’s Index | √(L × P) | A |
| Standard Error | σ / √n | A |
| DSCR | (PAT + Dep + Int) / (Installment + Int) | C |
| MPBF Method I | 75% × (CA − CL excl. bank) | C |
| MPBF Method II | 75% × CA − CL excl. bank | C |
| Nayak MPBF | 20% of Annual Turnover | C |
| Current Ratio | CA / CL | C |
| CRAR | (Tier I + Tier II) / RWA × 100 | D |
| LCR | HQLA / Net Cash Outflows ≥ 100% | D |
| ROA | (Net Profit / Total Assets) × 100 | D |
| NIM | (Net Interest Income / Avg Earning Assets) × 100 | D |
| Gross NPA Ratio | (Gross NPA / Gross Advances) × 100 | D |