Answer & Explanation
B) Capital Adequacy Ratio
Capital Adequacy Ratio (CAR) is also known as Capital to Risk (Weighted) Assets Ratio (CRAR), is the ratio of a bank's capital to its risk.
1. The capital adequacy ratio (CAR) is a measure of a bank's capital.
2. It is used to protect depositors and promote the stability and efficiency of financial systems around the world.
3. National regulators track a bank's CAR to ensure that it can absorb a reasonable amount of loss and complies with statutory Capital requirements.