Following are the information of a hypothetical commercial bank (Rs in thousands) : Item Rs 30,000 Common Stock Rs 30,000 Perpetual preferred stock…
BBS Management of Financial Institutions · 2082 · Solved Question with Answer
Following are the information of a hypothetical commercial bank (Rs in thousands)
| Item | Rs 30,000 |
| Common Stock | Rs 30,000 |
| Perpetual preferred stock | 5,000 |
| Surplus | 2,000 |
| Undivided profit | 100,000 |
| Capital reserves | 1,000 |
| Reserves for loan and lease losses | 5,000 |
| Subordinated notes and debentures | 2,000 |
a. What is Tier 1 capital, Tier 2 capital, and Total capital?
b. If the bank has total risk weighted assets (in thousands) of Rs 2,840,000, does it have adequate capital under regulatory standard?
c. If risk adjusted assets equal Rs 2,000,000(thousand), is capital 'adequate?