📝 One-liners · 65 cards
Regulatory Capital and Capital Adequacy
What is regulatory capital in the context of Basel III?
Regulatory capital is the minimum amount of capital that banks must hold as mandated by regulators to absorb unexpected losses and ensure solvency. It comprises Tier 1 (going-concern) and Tier 2 (gone-concern) capital components.
What is the minimum Capital Adequacy Ratio (CAR) required for Indian banks under Basel III?
Minimum CAR is 11.5% including Capital Conservation Buffer.
What does Capital Adequacy Ratio (CAR) measure?
CAR measures a bank's capital in relation to its risk-weighted assets, indicating the bank's ability to absorb losses before becoming insolvent. Under Basel III, the minimum CAR prescribed by RBI is 9%.
What is the minimum total capital ratio prescribed by RBI under Basel III?
RBI prescribes minimum total capital ratio of 9%.
🔒
Unlock 65 revision one-liners
Interactive flashcard deck — flip every card to drill questions and answers, mark the ones you got wrong, and revise smarter for Regulatory Capital and Capital Adequacy.
🪙
Unlock cost
300 coins
30-day access · re-unlocks free for 30 days