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.
Video from our Channel

Random Articles


  • Anonymous

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