Mathematics · Banking Ratios & Capital Adequacy
Calculate the Capital to Risk-weighted Assets Ratio (CRAR) for a bank based on the following data: Common Equity Tier 1 (CET1) Capital = ₹8,000 Crore Additional Tier 1 Capital = ₹2,000 Crore Tier 2 Capital = ₹4,000 Crore Total Risk Weighted Assets (RWA) = ₹1,00,000 Crore Does the bank meet the minimum regulatory CRAR requirement of 9% under Basel III norms as per RBI guidelines?
- 1CRAR is 14%; No, it does not meet the requirement because Tier 2 is too high.
- 2CRAR is 12%; Yes, it meets the requirement.
- 3CRAR is 14%; Yes, it meets the requirement.✓
- 4CRAR is 10%; No, it does not meet the requirement.
Correct answer
CRAR is 14%; Yes, it meets the requirement.
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