Question

As per RBI's discussion paper on ECL model for banks what is the recommended treatment for the transitional adjustment amount in relation to the adoption of the ECL approach?

A The transitional adjustment amount should be deducted from the Common Equity Tier 1 (CET 1) capital.
B The transitional adjustment amount should be excluded from the calculation of capital ratios.
C The transitional adjustment amount should be added back to the CET 1 capital.
D The transitional adjustment amount should be treated as a separate provision and accounted for separately.
E The treatment of the transitional adjustment amount is not specified in the proposal.
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