BASEL III Part 2, commercial paper, WMA, Documentation
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for VIDEO LECTURES OF ASHISH SIR (FOR ALL SCALES) — Bank Promotions.
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What is the minimum Common Equity Tier 1 (CET1) ratio prescribed under Basel III?
Under Basel III, banks must maintain a minimum CET1 ratio of 4.5% of Risk-Weighted Assets (RWA).
What is the minimum Tier 1 capital requirement under Basel III for Indian banks?
Minimum Tier 1 capital is 8.5% of RWA including CCB.
What is the Capital Conservation Buffer (CCB) required under Basel III and what does it consist of?
The Capital Conservation Buffer is 2.5% of RWA and must be maintained entirely in the form of Common Equity Tier 1 capital.
What is the minimum Total Capital Ratio prescribed under Basel III for Indian banks?
Minimum Total Capital Ratio is 11.5% including Capital Conservation Buffer.
What is the total minimum capital requirement including Capital Conservation Buffer under Basel III?
The total minimum capital requirement including CCB is 10.5% of RWA (8% minimum total capital + 2.5% CCB).
What are Tier 2 instruments under Basel III and what is their maximum limit?
Tier 2 instruments include subordinated debt; maximum limit is 2% of RWA.
What is the Countercyclical Capital Buffer (CCyB) under Basel III and its range?
The CCyB is an additional capital buffer ranging from 0% to 2.5% of RWA, activated by national regulators during periods of excess credit growth to absorb losses in downturns.
What is the purpose of the Capital Conservation Buffer under Basel III?
CCB absorbs losses during financial stress periods to sustain lending.
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