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      Question

      What is the expected Common Equity Tier 1 (CET1) capital

      improvement range for banks under the revised Basel III norms?
      A 20–70 basis points Correct Answer Incorrect Answer
      B 5–25 basis points Correct Answer Incorrect Answer
      C 15–40 basis points Correct Answer Incorrect Answer
      D 10–50 basis points Correct Answer Incorrect Answer
      E 30–60 basis points Correct Answer Incorrect Answer

      Solution

      According to IIFL Financials and other sources, the proposed cut in risk weights—especially for MSME and residential mortgage loans—is anticipated to lead to a 10–50 basis points (bps) improvement in CET1 capital for banks. This change enhances the capital position of banks and encourages more credit to key sectors.

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