What is tier 3 capital?

Tertiary capital is the tier 3 capital. This capital is held on to by many banks to support their risks derived from trading activities, foreign currency risk, commodities risk, market risk. Although tier 3 capital has much more varied types of debts when compared to tier 2, and tier 1 capital; the quality of those debts are lesser than either that of tier 2 or tier 1 capital. You can read about the Capital Adequacy Ratio (CAR) in the given link.

Further readings:

  1. Topic-Wise GS 3 Questions for UPSC Mains
  2. Basel III Norms – Regulations by Basel Committee on Banking Supervision

Related Links

Financial Stability Report (FSR) 3030

Bad Bank – Recent Proposal by Indian Banking Association

List of Important Banking Sector Reforms & Acts

UPSC Mains General Studies Paper-III Strategy, Syllabus & Structure

Cash Reserve Ratio – Importance, Advantages & Effects

Non Performing Assets (NPA) – Facts for UPSC GS-III

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