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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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