Multiple choice

For a securitization company, which of the following conditions is applicable for their capital and capital adequacy ratio?

  1. Minimum capital of Rs. 200 cr and capital adequacy ratio of 15% of the financial assets acquired by the company

  2. Minimum capital of Rs. 100 cr and capital adequacy ratio of 15% of the financial assets acquired by the company

  3. Minimum capital of Rs. 100 cr and capital adequacy ratio of 10% of the financial assets acquired by the company

  4. Minimum capital of Rs. 200 cr and capital adequacy ratio of 10% of the financial assets acquired by the company
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B Correct answer
Explanation

Every Securitization Company or Reconstruction Company shall maintain, on an ongoing basis, a capital adequacy ratio, which shall not be less than fifteen percent of its total risk weighted assets and minimum capital of Rs. 100 cr.

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