Capital Adequacy Ratio

CRAR is the acronym for capital to risk weighted assets ratio, a standard metric to measure balance sheet strength of banks.
BASEL I and BASEL II are global capital adequacy rules that prescribe a minimum amount of capital a bank has to hold given the size of its risk weighted assets. The old rules mandate banks to back every Rs 100 of commercial loans with Rs 9 of capital irrespective of the nature of these loans. The new rules suggest the amount of capital needed depends on the credit rating of the customer.



  • Anonymous

    Please guide for SBI Specialist Management Exam – General awareness & Banking Finance section