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    Question

    A bank’s revaluation reserves increased by

    ₹500 crore due to securities revaluation. What is the effect on Basel capital?
    A CET1 improves Correct Answer Incorrect Answer
    B Total Tier 1 improves Correct Answer Incorrect Answer
    C Tier 2 improves Correct Answer Incorrect Answer
    D No effect Correct Answer Incorrect Answer
    E Reduces capital Correct Answer Incorrect Answer

    Solution

    Under Basel III, revaluation reserves are treated as Tier-2 capital, not part of Tier-1.

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