Audit - 30. page

Hybrid Debt Capital Instruments Those instruments which have close similarities to equity, in particular when they are able to support losses on an ongoing basis without triggering liquidation, they may […]

Subordinated Debt Banks can raise, with the approval of their Boards, rupee subordinated debt as Tier II capital, subject to the terms and conditions given in the Annexure 5 to the […]

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 […]

Undisclosed Reserves They can be included in capital, if they represent accumulations of posttax profits and are not encumbered by any known liability and should not be routinely used for […]

Re-valuation Reserves It would be prudent to consider re-valuation reserves at a discount of 55 percent while determining their value for inclusion in Tier II capital. Such reserves will have […]

Foreign Currency Translation Reserve (FCTR) As stated in RBI’s circular no. RBI/2015-16/331 DBR.No.BP.BC.83/21.06.201/2015-16 dated 01st March, 2016, Banks may, at their discretion, reckon foreign currency translation reserve arising due to […]

Window-dressing There are several ways in which the deposits of a bank may be inflated for purposes of balance sheet presentation. For example, some of the constituents may be allowed […]

Know Your Customers Norms RBI has issued instructions to all banks to implement without fail certain procedural norms on KYC. Failure would attract levy of penalty and if penalty has […]

Capital The following particulars have to be given in respect of share capital in the balance sheet. (a) For Banks Incorporated in India Authorised Capital (shares of Rs.__ each) Issued […]

Capital Adequacy Measures in India In India, the statutes governing various types of banks lay down the minimum capital requirements for them. Besides, there are also requirements for maintenance of […]