Banks are required to maintain a minimum Pillar 1 Capital to Risk-weighted Assets

Ratio (CRAR) of 9% on an on-going basis (other than capital conservation buffer and

countercyclical capital buffer etc.)

Minimum total Capital(MTC) of total risk weighted assets = 9%

Tier-2 maximum 2%
Elements of CET-1

1. Common shares issued by the bank

2. Stock surplus resulting from issue of common shares
3. Statutory reserves
4. Capital reserves (surplus on sale proceed of assets)
5. Other disclosed free reserves
6. Balance in P&L at the end of previous FY

7.
8. Common shares issued by consolidated subsidiaries
9. Less: regulatory adjustments or deductions

Elements of AT-1

1. Perpetual Non-cumulative preference shares (PNCPS)

2. Stock surplus (premium) resulting from the issue of AT-1 instruments
3. Debt capital instrument eligible for inclusion in AT-1
4. Any other type of instrument generally notified by RB
5. AT-1 instruments issued by consolidated subsidiaries of the bank and held by third parties
6. Less: Regulatory Adjustments/ Deductions
Elements of Tier-2

1. General provisions and loan-loss reserves

a. General provision
i. standard assets
ii. Floating provisions
iii. Incremental provisions in respect of unhedged foreign currency exposures
iv. Provisions held for country exposures
v. Investment reserve account
vi. Excess provisions which arise on account of sale of NPAs
vii. Countercyclical provisioning buffer
b. Loan-loss reserves
i. Provisions for identified deterioration of particular assets or loan liabilities
ii. Specific provisions on NPAs
iii. Provisions for diminution of fair value of assets
iv. Provisions against depreciation in the value of investments
2. Debt capital instruments issued by banks
3. PCPS, RNCPS, RCPS
4. Stock surplus resulting from issue of instruments included in Tier-2 capital
5. Instruments held by consolidated subsidiaries
6. Revaluation reserves discounted at 55%
7. Any other instrument notified by RB
8. Less: Regulatory adjustments/deductions