Question

All of the following are considered under Tier II capital of a bank, except ________

Q: Answer-All of the following are considered under Tier II capital of a bank, except ________

Tier II capital is one of the components of regulatory capital of a bank. It is also known as supplementary capital. Tier II items qualify as regulatory capital to the extent that they can be used to absorb losses arising from a banks activities. Tier IIs capital loss absorption capacity is lower than that of Tier I capital. Tier II capital consists of undisclosed reserves, revaluation reserves, general provisions and loss reserves, hybrid capital instruments debt capital instruments, perpetual cumulative preference shares Redeemable Non-Cumulative Preference Shares Redeemable Cumulative Preference Shares subordinated debt investment reserve account Perpetual Non-cumulative Preference Shares and Innovative Perpetual Debt Instruments IPDI are eligible for inclusion as Tier I capital.