Explanation:

Here’s the thing—Tier-I capital is basically a bank’s core strength, the money that’s really available for absorbing losses straight away. Let’s break down those options.

- Statutory reserve: This is money banks are legally required to set aside out of their profits. It actually is part of Tier-I capital.

- Paid-up capital: This is the actual cash investors have put in. It’s the most basic form of Tier-I capital.

- Capital reserve: This reserve comes from profits, but not from regular operations (like selling an asset). It’s included in Tier-I.

- Revaluation reserve: Now, this one is different. It’s created when banks revalue their assets, often making their balance sheet look better. But it isn’t reliable in a crisis, so under banking rules, it’s not a main component of Tier-I capital.

Correct answer: Option 4 – Revaluation reserve