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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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