What are the Ingredients of Supplementary Capital (Tier II) ?

Answer:

Tier 2 capital called ‘Supplementary Capital’ represents other elements which fall short of some of the characteristics of the core capital but contribute to the overall strength of a bank:

a) General provision

b) Revaluation reserves

·        Revaluation reserve for fixed assets

·        Revaluation reserve for securities

·        Revaluation reserve for equity instrument

c) All other preference shares

d) Subordinated debt