Economics · Economy
Assertion (A): Banks are required to maintain a Capital Adequacy Ratio (CAR) under Basel norms to ensure financial stability and absorb unexpected losses. Reason (R): A higher CAR reduces the risk of bank insolvency and enhances depositor confidence in the banking system.
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1(A) is false but (R) is true
- 2(A) is true but (R) is false
- 3Both (A) and (R) are true but (R) is not the correct explanation of (A)
- 4Both (A) and (R) are true and (R) is the correct explanation of (A)✓
Correct answer
Both (A) and (R) are true and (R) is the correct explanation of (A)
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