RBI1 min read
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.
Last updated: 17 May 2026
Frequently Asked Questions (FAQs)🔗
Q1. What is Capital Adequacy Ratio in Indian corporate law?▼
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.
Q2. Why is Capital Adequacy Ratio important for compliance?▼
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.
Q3. Who should know about Capital Adequacy Ratio?▼
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.
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