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Under the revised PCA Framework, RBI will track which of these indicators to check the capital of a bank?
A)
Net NPA Ratio
B)
Tier I Leverage Ratio
C)
CRAR
D)
All of the above

Correct Answer : Option (C) - CRAR


To keep track of Capital, Asset Quality and Leverage the indicators that would be tracked are : CRAR / Common Equity Tier I Ratio, Net NPA Ratio and Tier I Leverage Ratio respectively. i.e to track Capital of a bank RBI will see RAR/ Common Equity Tier I Ratio of the bank, to track Asset Quality of the bank, RBI will track Net NPA Ratio of the bank, similarly, to track Leverage of the bank, RBI will track Tier I Leverage Ratio of the bank.

Published On : November 5, 2021
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