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    Question

    Under RBI’s proposal, banks may undertake acquisition

    financing up to what percentage of their Tier-1 capital? 
    A 5% Correct Answer Incorrect Answer
    B 10% Correct Answer Incorrect Answer
    C 15% Correct Answer Incorrect Answer
    D 20% Correct Answer Incorrect Answer
    E 25% Correct Answer Incorrect Answer

    Solution

    RBI proposed allowing banks to undertake acquisition financing up to 20% of their Tier-1 capital. This exposure limit ensures that banks maintain prudential capital buffers while participating in corporate acquisition financing activities.  

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