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For a fund to count in Tier I it must be created out of:

ANet purchase
BNet profit
CNet premium
DNet proceeds
Answer & Solution
Correct answer: B. Net profit
1. Two conditions are set for such a fund. 2. It must also be a free rather than a specific reserve. 3. It must be an appropriation of net profit. _Source: RBI Master Circular, Prudential Norms on Capital Adequacy, Primary (Urban) Co-operative Banks_
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