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Q » What is capital adequacy ratio (CAR)?

Steven

06 Dec, 2025

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A » The capital adequacy ratio (CAR) is a financial metric used to assess a bank's ability to absorb potential losses and protect depositors by determining its capital relative to risk-weighted assets. It ensures that banks maintain a sufficient capital buffer to withstand financial stress, fostering stability in the banking system. Regulators typically set minimum CAR standards to safeguard the economy from potential banking crises.

Michael

06 Dec, 2025

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A »The capital adequacy ratio (CAR) is a measure of a bank's financial health, calculated by dividing its capital by its risk-weighted assets. It indicates a bank's ability to absorb potential losses and maintain stability. A higher CAR indicates a bank's stronger financial position and lower risk of insolvency.

David

06 Dec, 2025

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