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RBI proposed Minimum 11.5% Capital for Four AIFIs

Published on October 24, 2021
Current Context: The Reserve Bank of India (RBI) has proposed a minimum of 11.5% capital for four All India Financial Institutions (AIFI).
RBI proposed Minimum 11.5% Capital for Four AIFIs
  • The 4 AIFIs are: National Housing Bank, Exim Bank, Small Industries Development Bank of India, and National Bank for Agriculture & Rural Development.
  • These capital norms will be applicable from 2022.
  • This minimum capital is in accordance with the Basel III framework to raise the resilience of AIFI in periods of stress.
  • These 4 AIFIs should have a minimum total capital of 9% from 1st April 2022 and a minimum capital buffer should be at 2.5%.
  • The minimum common equity tier 1 (CET1) capital of these institutions should be 5.5% and the minimum tier 1 capital requirement should be at 7%.
  • These AIFIs should adopt standardized approaches to measure capital charge for market risk and credit risk.
  • Static Part: 
    • HQ of RBI: Mumbai
    • Governor of RBI: Shaktikanta Das

Question: 

Q.1 For which entity has RBI proposed a minimum of 11.5% capital norms in accordance with the Basel III framework to raise their resilience in periods of stress?
a. National Bank for Agriculture & Rural Development
b. Small Industries Development Bank of India
c. Exim Bank
d. National Housing Bank 
e. All of the above

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