2
Question
Q. Consider the following statements in reference to Capital Conservation Buffer:
Which of the statements given above is/are correct?
Q. Consider the following statements in reference to Capital Conservation Buffer:
Which of the statements given above is/are correct?
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Solution
The correct option is B 2 only
Explanation:
Statement 1 is incorrect. The buffer was implemented in full as of 2019 and is set at 2.5% of total risk-weighted assets. It must be met with Common Equity Tier 1 (CET1) capital only, and it is established above the regulatory minimum capital requirement.
Statement 2 is correct. In view of the continuing stress on account of COVID-19 and in order to aid in the recovery process, it has been decided to defer the implementation of the last tranche of 0.625 percent of the Capital Conservation Buffer (CCB) from April 1, 2021, to October 1, 2021.
Explanation:
Statement 1 is incorrect. The buffer was implemented in full as of 2019 and is set at 2.5% of total risk-weighted assets. It must be met with Common Equity Tier 1 (CET1) capital only, and it is established above the regulatory minimum capital requirement.
Statement 2 is correct. In view of the continuing stress on account of COVID-19 and in order to aid in the recovery process, it has been decided to defer the implementation of the last tranche of 0.625 percent of the Capital Conservation Buffer (CCB) from April 1, 2021, to October 1, 2021.
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