Capital Adequacy Ratio

The ratio of a bank's capital to its risk-weighted assets (RWA), measuring financial strength under Basel III norms. Minimum CAR for Indian banks: 11.5% (including capital conservation buffer). Ensures banks can absorb losses.

Capital Adequacy Ratio is governed by the Reserve Bank of India under applicable banking and monetary policy frameworks. Understanding this concept is essential for ensuring regulatory compliance, avoiding penalties, and making informed corporate decisions in India.

Capital Adequacy Ratio is relevant for company secretaries, compliance officers, chartered accountants, corporate lawyers, board members, and all professionals dealing with RBI regulatory matters in India.