As per Basel and subsequent RBI guidelines, Common Equity Tier 1 (CET1) capital must be at least how much percentage of risk-weighted assets (RWAs) i.e., for credit risk + market risk + operational risk on an ongoing basis for Scheduled Commercial Banks?
As a matter of prudence, RBI has stipulated that scheduled commercial banks operating in India shall maintain a minimum total capital (MTC) of 9% of total risk weighted assets (RWAs) i.e., capital to risk weighted assets (CRAR). This will be further divided into different components I. Common Equity Tier 1 (CET1) capital must be at least 5.5% of risk-weighted assets (RWAs) i.e., for credit risk + market risk + operational risk on an ongoing basis. II. Tier 1 capital must be at least 7% of RWAs on an ongoing basis. Thus, within the minimum Tier 1 capital, Additional Tier 1 capital can be admitted maximum at 1.5% of RWAs. III. Total Capital (Tier 1 Capital plus Tier 2 Capital) must be at least 9% of RWAs on an ongoing basis. Thus, within the minimum CRAR of 9%, Tier 2 capital can be admitted maximum up to 2%. IV. If a bank has complied with the minimum Common Equity Tier 1 and Tier 1 capital ratios,then the excess Additional Tier 1 capital can be admitted for compliance with the minimum CRAR of 9% of RWAs. V. In addition to the minimum Common Equity Tier 1 capital of 5.5% of RWAs, banks are also required to maintain a capital conservation buffer (CCB) of 2.5% of RWAs6 in the form of Common Equity Tier 1 capital
Statements: P > Q ≤ R; Q ≥ O > S; T < S ≤ U
Conclusions:
I. T < R
II. U ≤ Q
III. P > U
...Statement: F ≥ G > I > E ≤ P, E = S ≥ P
Conclusion: I. F ≥ P II. G > P
Statements: Q > S ≥ R = T; U < V = W < X = Y ≤ T
Conclusions:
I. R > U
II. T < U
III. U ≥ R
Statements: D > E ≥ I > G; L = F < H ≤ G; L > J
Conclusions:
I. E > J
II. L ≤ D
III. I ≥ F
Statement: P > Q ≥ R = S ≤ T < U
Conclusions: I. T > Q II. U < P
...Statements: A > C > W > S ≤ M ≥ N = T
Conclusion:
I. M > C
II. S > A
Relationship between different elements is shown in the statements. Find if the conclusions also follow or not.
Statements: J ≥ Q = W ≥ D <...
Statement: M ≤ W, W < F, F = V, V ≥ C.
Conclusion: I. C > W II. M ≥ C
Statement: D < M < P = V = E ≥ T > Z
Conclusion: I. P > Z II. D > E
In the following question, a relationship between different elements is shown in the statements, followed by two conclusions I and II. Assuming the sta...
