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Excess CET1 capital may be used towards compliance with the:
ALiquid ratio
BLeverage ratio
CTier 1 ratio
DCash ratio
Answer & Solution
Correct answer: C. Tier 1 ratio
1. CET1 is the highest quality capital there is.
2. Surplus of it can fill a lower quality requirement.
3. It can count towards the 7 per cent Tier 1 ratio.
_Source: Reserve Bank of India (Commercial Banks - Prudential Norms on Capital Adequacy) Directions, 2025_
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