what is capital adequate ratio

Question Posted / bjanaki

4 Answers
12351 Views
Infosys, I also Faced
E-Mail Answers

Answers were Sorted based on User's Feedback

what is capital adequate ratio..

Answer / amit aggarwal

Capital Adequacy Ratio is the ratio of capital funds or own
funds to the risk weighted assets. According to Bassel's II
norms for BFC (Banking Financial Corporations)it must be
minimum 9% and for NBFC (for asset finance company it is
15% and for other financing services of NBFC it is 12%).

Is This Answer Correct ?

14 Yes

4 No

what is capital adequate ratio..

Answer / rucha kiran tavaskar

capital adequacy ratio is the ratio of capiatal funde or
own funds

Is This Answer Correct ?

8 Yes

3 No

what is capital adequate ratio..

Answer / ajay saxena

Capital adequacy ratios ("CAR") are a measure of the amount
of a bank's capital expressed as a percentage of its risk
weighted credit exposures.

Capital adequacy ratio is defined as

\mbox{CAR} = \cfrac{\mbox{Capital}}{\mbox{Risk}}

where Risk can either be weighted assets (\,a) or the
respective national regulator's minimum total capital
requirement. If using risk weighted assets,

\mbox{CAR} = \cfrac{T_1 + T_2}{a} ≥ 8%.[1]

The percent threshold (8% in this case, a common requirement
for regulators conforming to the Basel Accords) is set by
the national banking regulator.

Two types of capital are measured: tier one capital (T1
above), which can absorb losses without a bank being
required to cease trading, and tier two capital (T2 above),
which can absorb losses in the event of a winding-up and so
provides a lesser degree of protection to depositors.

Is This Answer Correct ?

3 Yes

0 No

what is capital adequate ratio..

Answer / tangachan

Adequacy of capital or owner's fund measured on the basis
of comparison with sources of finance.
Ideally it is 9 $ for banking cos
and 12% for non banking cos

Is This Answer Correct ?

2 Yes

0 No

Post New Answer

More Banking Finance Interview Questions

Why do you want to work with our company not others?

1 Answers

How may development banks are there in india and name them?

0 Answers

Why should a business prepare fund flow statement?

0 Answers

What is 'ways and means advance (wma)?