Consider the following statements regarding Total Capital of Banks:
Which of the following statements is/are correct?

1 only

No worries! We‘ve got your back. Try BYJU‘S free classes today!

2 only

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Both 1 and 2

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

Neither 1 nor 2

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is C Both 1 and 2
Total Capital of banks includes Tier 1 and Tier 2 capital.

Tier 1 includes Core capital that is paid up capital, disclosed reserves, reserves arising as a result of sale proceeds etc.

Tier 2 includes Subordinate capital that is debt capital instruments, revalued reserves, long term unsecured loans etc.

Tier 2 capital is considered less reliable than Tier 1 capital because it is more difficult to accurately calculate and to liquidate.

Suggest Corrections

Similar questions

1

2

3

RBI grants ‘in-principle’ approval to 10 applicants for Small Finance Banks. Consider the following statements regarding Small Finance Banks:

1) Small Finance Banks aim to address financial inclusion.

2) The minimum paid-up capital requirement for these banks would be Rs 100 crore only.

3) At least 50% of the loans should constitute loans and advances of up to Rs 25 lakhs.

Which of the above statements are correct?

Q. Consider the following statements about “Small Finance Banks” in India:

Which of the above given statements are correct?

Join BYJU'S Learning Program