Which of the following are not the components of Tier 1

Solution

Elements of Common Equity component of Tier 1 capital will comprise the following:

1. Common shares (paid-up equity capital) issued by the bank
2. Stock surplus (share premium) resulting from the issue of common shares;
3. Statutory reserves;
4. Capital reserves representing surplus arising out of sale proceeds of assets;
5. Revaluation reserves arising out of change in the carrying amount of a bank’s property consequent upon its revaluation may, at the discretion of banks, be reckoned as CET1 capital at a discount of 55%