Question

As per RBI norms, what is the capital adequacy ratio that Indian scheduled commercial banks are required to maintain?
1. 10.00%
2. 9.50%
3. 9.00%
4. 8.50%

Answer 1

Correct Answer - Option 3 : 9.00%

The correct answer is 9.00%.

• As per RBI norms, Indian scheduled commercial banks are required to maintain capital adequacy ratio (CAR) of 9%.
• While Indian public sector banks are emphasized to maintain a CAR of 12%.

• The Capital Adequacy Ratio (CAR) is a measurement of a bank's available capital expressed as a percentage of a bank's risk-weighted credit exposures.
• The Capital Adequacy Ratio, also known as the capital-to-risk weighted assets ratio (CRAR), is used to protect depositors and promote the stability and efficiency of financial systems around the world. 
• It is decided by central banks and bank regulators to prevent commercial banks from taking excess leverage and becoming insolvent in the process.