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CAIIB BFM CASE STUDY ON BASEL III BY ASHISH SIR
What is the minimum Common Equity Tier 1 (CET1) capital ratio required under Basel III?
Under Basel III, banks must maintain a minimum CET1 ratio of 4.5% of Risk-Weighted Assets (RWA). This is the core capital requirement comprising mainly ordinary shares and retained earnings.
What is the minimum Total Capital Adequacy Ratio (CAR) required under Basel III?
Minimum total CAR is 10.5% including conservation buffer.
What is the Capital Conservation Buffer (CCB) prescribed under Basel III?
The Capital Conservation Buffer is an additional 2.5% of RWA above the minimum CET1, composed entirely of CET1 capital. It is designed to ensure banks build up capital outside periods of stress that can be drawn down when losses are incurred.
What is the full form of CRAR in the context of Basel III for Indian banks?
CRAR stands for Capital to Risk-Weighted Assets Ratio.
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