πŸ“’ Too many exams? Don’t know which one suits you best? Book Your Free Expert πŸ‘‰ call Now!

  • google app store apple app store
  • βœ–

      Question

      According to RBI guidelines (aligned with Basel norms),

      what is the minimum Capital to Risk-Weighted Assets Ratio (CRAR or CAR) that scheduled commercial banks in India are required to maintain?
      A 8% (as per Basel minimum) Correct Answer Incorrect Answer
      B 9% (as mandated by RBI for Indian banks) Correct Answer Incorrect Answer
      C 10% Correct Answer Incorrect Answer
      D 12% Correct Answer Incorrect Answer
      E 15% Correct Answer Incorrect Answer

      Solution

      β€’ The Capital Adequacy Ratio (CAR), also known as the Capital to Risk-Weighted Assets Ratio (CRAR), measures a bank’s capital in relation to its risk-weighted credit exposures. β€’ Under Basel II/III norms, the international minimum requirement is 8%. β€’ However, the RBI has prescribed a stricter requirement of 9% for scheduled commercial banks in India to provide an additional safety buffer. β€’ For NBFCs, the requirement is even higher at 15%. Thus, in India, scheduled commercial banks must maintain a minimum CAR of 9%.

      Practice Next
      ask-question