Definition (1):
Primary capital is the sum of total equity capital, the allowance for possible loan losses, mandatory convertible debentures, and minority interests in consolidated subsidiaries, minus intangible assets other than purchased loan servicing rights.
Definition (2):
Primary capital is the equity capital with the help of which a financial institution or bank preserves its deposit and continues lending functions. It is the total value that we get after adding up common stock, capital surpluses, compulsory convertible debt, capital reserves, and the undivided profits.
Definition (3):
According to the lawinsider.com dictionary, “Primary Capital means, at any date as determined on a Consolidated basis for the Borrower and its Subsidiaries and in accordance with GAAP, the sum of (a) the aggregate amount of total equity capital of Borrower and its Subsidiaries as at the date of determination, plus (b) the Loan and Lease Allowance as at the date of determination.”
It refers to the funds of a financial institution or bank listed under the headings such as paid-up capital, non-redeemable preference shares, share premium, accumulated profit and loss, and general reserve fund, and this term also consists of the other funds listed under other headings as can be prescribed as primary capital by the State Bank from time to time.