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      Question

      A bank has Tier I capital of ₹900 crore and Tier II

      capital of ₹300 crore. Risk Weighted Assets increase from ₹8,000 crore to ₹10,000 crore due to large sanction. What is the impact on CRAR?
      A CRAR improves Correct Answer Incorrect Answer
      B CRAR remains same Correct Answer Incorrect Answer
      C CRAR deteriorates Correct Answer Incorrect Answer
      D CRAR becomes negative Correct Answer Incorrect Answer
      E CRAR becomes zero Correct Answer Incorrect Answer

      Solution

      Capital unchanged, RWA increases → CRAR falls.

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