Attempt this previous-year question. The correct option stays hidden until you choose.
Consider the following statements:
1. Capital Adequacy Ratio (CAR) is the amount that banks have to maintain in the form of their own funds to offset any loss that banks incur if the account-holders fail to repay dues.
2. CAR is decided by each individual bank.
Which of the statements given above is/are correct?
Pick an option to check yourself.
• Correct Answer: A
• CAR (or CRAR) is the ratio of a bank's own funds to its risk-weighted assets, maintained to absorb losses and protect depositors.
• It is a regulatory standard set by RBI based on Basel Accords, not decided by individual banks.
• Statement 2 is incorrect.
Attempt Prelims MCQs or open Mains questions by paper — then continue the same bank inside the app with visual decks.
GyanGram