Home › SBI PO › Banking Awareness › Basel Norms & Capital › For a fund to count in Tier I it must be created…
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_
Related questions
The specific risk capital charge on security receipts is:Excess CET1 capital may be used towards compliance with the:Revaluation reserves rejected from CET1 capital may be counted in:The Capital Conservation Buffer applies at the solo level and the:The extra capital charge on a D-SIB must be held as:Which is a D-SIB indicator used by the Reserve Bank?How often does the Reserve Bank disclose the list of D-SIBs?Banks of high systemic importance are designated as: