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      Question

      What is the minimum capital adequacy ratio to be

      maintained by a Small Finance Bank?
      A 7.5% Correct Answer Incorrect Answer
      B 9% Correct Answer Incorrect Answer
      C 10% Correct Answer Incorrect Answer
      D 12% Correct Answer Incorrect Answer
      E 15% Correct Answer Incorrect Answer

      Solution

      The capital adequacy framework for SFB is as follows:

      Minimum Capital Requirement 15%
      Common Equity Tier 1 6%
      Additional Tier I 1.5%
      Minimum Tier I capital 7.5%
      Tier 2 capital 7.5%
      Capital Conservation Buffer Not Applicable
      Counter-cyclical capital buffer Not applicable
      Pre-specified Trigger for conversion of AT1 CET1 at 6% up to March 31, 2019, and 7% thereafter

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