RBI1 min read
Tier 2 Capital
Supplementary capital of a bank under Basel III including subordinated debt, revaluation reserves, and general provisions. Less permanent than Tier 1 capital. Together with Tier 1, must meet the total CRAR requirement of 11.5%.
Last updated: 17 May 2026
Frequently Asked Questions (FAQs)🔗
Q1. What is Tier 2 Capital in Indian corporate law?▼
Supplementary capital of a bank under Basel III including subordinated debt, revaluation reserves, and general provisions. Less permanent than Tier 1 capital. Together with Tier 1, must meet the total CRAR requirement of 11.5%.
Q2. Why is Tier 2 Capital important for compliance?▼
Tier 2 Capital is governed by the Reserve Bank of India under applicable banking and monetary policy frameworks. Understanding this concept is essential for ensuring regulatory compliance, avoiding penalties, and making informed corporate decisions in India.
Q3. Who should know about Tier 2 Capital?▼
Tier 2 Capital is relevant for company secretaries, compliance officers, chartered accountants, corporate lawyers, board members, and all professionals dealing with RBI regulatory matters in India.
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