Question

    CRAR ensures that the bank can absorb a reasonable

    amount of loss and complies with statutory Capital requirements. What does the ‘A’ stand for in CRAR?
    A Asset Correct Answer Incorrect Answer
    B Assimilation Correct Answer Incorrect Answer
    C Adequacy Correct Answer Incorrect Answer
    D Amalgamation Correct Answer Incorrect Answer
    E Authorised Correct Answer Incorrect Answer

    Solution

    Capital to Risk (Weighted) Assets Ratio (CRAR) is also known as Capital adequacy Ratio, the ratio of a bank's capital to its risk. The RBI tracks a bank's CAR to ensure that the bank can absorb a reasonable amount of loss and complies with statutory Capital requirements.

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