what is capital adequacy ratio?

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what is capital adequacy ratio?

2006-09-26 02:54:29 · 2 answers · asked by MURUGAN K 1 in Business & Finance ➔ Other - Business & Finance

2 answers

The ratio of a bank's capital to its risk-weighted credit exposure. International standards recommend a minimum for this ratio, intended to permit banks to absorb losses without becoming insolvent, in order to protect depositors.

2006-09-26 03:08:01 · answer #1 · answered by rishabh 1 · 0⤊ 0⤋

Capital adequacy ratio is the ratio between the capital and risk weighted assets. Basel Committee in 1988 set standards for banking supervision internationally which has been accepted by many countries including India. Presently we are moving towards Basel II accord. For more info please refer to the source listed below:

2006-09-26 05:14:57 · answer #2 · answered by cvrk3 4 · 0⤊ 0⤋