Question

What does first ‘P’ in the security instrument PNCPS, stand for?

A Participative Correct Answer Incorrect Answer
B Perpetual Correct Answer Incorrect Answer
C Preference Correct Answer Incorrect Answer
D Priority Correct Answer Incorrect Answer
E Profitable Correct Answer Incorrect Answer

Solution

Perpetual Non-Cumulative Preference Shares ( PNCPS ) are a type of preference shares which do not have a redemption date and also do not have a cumulative clause for the dividend. These are treated as part of Tier I capital, as per RBI, for the calculation of capital adequacy of the bank.

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