9.What does the so called capital to risk weighted assets ratio (CRAR) denote with respect to the banks? Balance sheet strength of the banks Immunity of banks against capital loss Day today Liquidity condition of the banks Select the correct option from the codes given below: [A] Only 1 & 2 [B] Only 2 & 3 [C] Only 1 & 3 [D] 1, 2 & 3 Show Answer
It is decided by central banks and bank regulators to prevent commercial banks from taking excess leverage and becoming insolvent in the process. The risk weighted assets take into account credit risk, market risk and operational risk. The Basel III norms stipulated a capital to risk weighted assets of 8%.
