How to calculate Capital Adequacy Ratio (CAR)?

What is Capital Adequacy Ratio (CAR)?

The Capital Adequacy Ratio (CAR) is a financial metric used to assess the stability and financial health of a bank. It measures a bank’s capital in relation to its risk-weighted assets, ensuring the bank can absorb potential losses and meet its obligations—thereby reducing the risk of insolvency.

Leave a Reply

Your email address will not be published. Required fields are marked *