DMPQ: Define the following terms; a) Tier -1 capital b) Tier -2 capital c) CAR d) Public debt( Economy)

Tier-1 capital:     Tier 1 capital, used to describe the capital adequacy of a bank, is core capital that includes equity capital and disclosed reserves. Tier 1 capital is essentially the most perfect form of a bank’s capital — the money the bank has stored to keep it functioning through all the risky transactions it performs, such as trading/investing and lending.

 

Tier-2 capital:        Tier-2 capital is the secondary component of bank capital, that makes up a bank’s required reserve. Tier 2 capital is a measure of a bank’s financial strength with regard to the second most reliable forms of financial capital, from a regulator’s point of view. It consists of accumulated after-tax surplus of retained earnings, revaluation reserves of fixed assets and long-term holdings of equity securities, general loan-loss reserves, hybrid (debt/equity) capital instruments, and subordinated debt.

 

 

CAR:     Capital adequacy ratio is the percentage of total capital(total of tier 1 and tier 2 capitals) to the total risk-weighted assets. It is a measure of banks capital. It helps to prevent bank failure.

 

Public debt:    Public debt includes internal debt comprising borrowings inside the country like market loans; borrowings from RBI   on the basis of special securities bills and external debt comprising loans from foreign countries, International financial institutions, NRI deposits.

 

BPCS Notes brings Prelims and Mains programs for BPCS Prelims and BPCS Mains Exam preparation. Various Programs initiated by BPCS Notes are as follows:- For any doubt, Just leave us a Chat or Fill us a querry––

Hope we have satisfied your need for BPSC Prelims and Mains Preparation

Kindly review us to serve even better


BPSC Mains Test Series 2022

20 Quality mock tests and GS Mains Notes

Mains Test Series and Notes (With Evaluation and Skill Enhancement)

Mains Printed Notes (With COD)

Mains PDF Notes (Digital)


For Any Suggestion’s and Updates kindly Comments your doubts Here

Subscribe to BPSC Notes

Never Miss any BPSC important update!

Join 8,598 other subscribers
error: Content is protected !!