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    Question

    The minimum Common Equity Tier 1 (CET1) capital for banks in India as specified by RBI is:

    A 4.5% Correct Answer Incorrect Answer
    B 5.0% Correct Answer Incorrect Answer
    C 5.5% Correct Answer Incorrect Answer
    D 6.0% Correct Answer Incorrect Answer
    E 6.5% Correct Answer Incorrect Answer

    Solution

    Minimum Common Equity Tier 1 (CET1) for banks in India is 5.5%. Tier 1 capital = common equity tier 1 (CET1) capital+ Additional Tier 1 capital (AT1) Common equity Tier 1 comprises of a bank’s core capital and includes common shares, stock surpluses resulting from the issue of common shares, retained earnings, common shares issued by subsidiaries and held by third parties. Additional Tier 1 capital is defined as those uncommon instruments which are eligible to be included in this tier.

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