Multiple choice

General provisions and loan loss reserves can be taken in the capital funds under Tier II, maximum to the extent of ______ of total risk weighted assets.

  1. 0.50%

  2. 0.75%

  3. 1.00%

  4. 1.25%

Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

General Provisions and Loss Reserves: Such reserves can be included in Tier II capital if they are not attributable to the actual diminution in value or identifiable potential loss in any specific asset and are available to meet unexpected losses. General provisions and loss reserves will be admitted up to a maximum of 1.25 percent of total risk weighted assets.