The International Financial Service Centres Authority on 26th April 2021 has issued a framework defining the components of regulatory capital and its computation. The framework shall be adopted for computation of regulatory capital prescribed for an FC/FU as the case may be, registered under section 3 of IFSCA (Finance Company)Regulations,2021.
The Common Equity Tier 1 for FCs shall consist of a sum of common shares issued by the FC that meet the criteria for classification as common shares for regulatory purposes, stock surplus (share premium) resulting from issue of instruments included in CET1 capital, retained earnings, accumulated other Comprehensive income and disclosed reserves, qualifying minority interest and less regulatory adjustments/deductions and shall exclude dividends.
Additional Tier 1capital for FCs shall consist of sum of capital instruments meeting the criteria for AT1 capital and stock surplus.
Tier 2 capital for FCs, shall consist of sum of the instruments issued by the FC/FU that meet the criteria for inclusion in T2 capital, stock surplus (share premium) resulting from the issue of instruments included in T2capital, additional Qualifying minority interest, qualifying loan loss provisions and regulatory Adjustments/deductions.
