GK
BANKING AWARENESS AND SEBI
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Capital At Risk
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Capital Adequacy Ratio
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Court Appointed Receiver
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Computer Assisted Reporting
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Detailed explanation-1: -Definition: Capital Adequacy Ratio (CAR) is the ratio of a bank’s capital in relation to its risk weighted assets and current liabilities. It is decided by central banks and bank regulators to prevent commercial banks from taking excess leverage and becoming insolvent in the process.
Detailed explanation-2: -The capital ratio is the percentage of a bank’s capital to its risk-weighted assets. Weights are defined by risk-sensitivity ratios whose calculation is dictated under the relevant Accord. Basel II requires that the total capital ratio must be no lower than 8%.
Detailed explanation-3: -The Reserve Bank of India has hiked the minimum capital adequacy ratio (CAR) for Urban Cooperative Banks (UCBs) with deposits above Rs 100 crore to 12 per cent from the earlier floor of 9.0 per cent. It has provided a glide path till March 2026 to meet revised CAR norm in phases for UCBs that don’t meet it currently.