Question

What is the minimum Common Equity Tier 1 to be kept by the banks as per RBI guidelines of BASEL Norms?

A 4.5% Correct Answer Incorrect Answer
B 5.5% Correct Answer Incorrect Answer
C 7% Correct Answer Incorrect Answer
D 8% Correct Answer Incorrect Answer
E 9% Correct Answer Incorrect Answer

Solution

S.No. Regulatory Capital As % to RWAs (i) Minimum Common Equity Tier 1 Ratio 5.5 (ii) Capital Conservation Buffer (comprised of Common Equity) 2.5 (iii) Minimum Common Equity Tier 1 Ratio plus Capital Conservation Buffer [(i)+(ii)] 8.0 (iv) Additional Tier 1 Capital 1.5 (v) Minimum Tier 1 Capital Ratio [(i) +(iv)] 7.0 (vi) Tier 2 Capital 2.0 (vii) Minimum Total Capital Ratio (MTC) [(v)+(vi)] 9.0 (viii) Minimum Total Capital Ratio plus Capital Conservation Buffer [(vii)+(ii)] 11.5

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