Core Capital/ Tier-1 Capital
'Core Capital' also known as Tier-1 Capital of a commercial bank comprises of highest quality of capital elements like –
a) Paid up capital
b) Non-repayable share premium account c) Statutory reserve
d) General reserve
e) Retained earnings
f) Minority interest in subsidiaries
g) Non-cumulative irredeemable preference shares h) Dividend equalization account
Supplementary Capital/ Tier-2 Capital
'Supplementary Capital' also known as Tier-2 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