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The extra capital charge on a D-SIB must be held as:
AAT1 capital
BTier 2 capital
CCash reserves
DCET1 capital
Answer & Solution
Correct answer: D. CET1 capital
1. The surcharge rises with the bank's bucket.
2. It has to be genuinely loss absorbing.
3. So it is maintained in the form of CET1 capital.
_Source: Reserve Bank of India (Commercial Banks - Prudential Norms on Capital Adequacy) Directions, 2025_
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