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Banking Sample Paper SBI Clerk Grade (Main) Sample Test Paper-2

  • question_answer
    CAR is the ratio of a bank's capital to its risk, expressed as a percentage of a bank's risk weighted credit exposures. What does 'A' stand for in CAR?

    A)  Adequacy

    B)  Assets

    C)  Average

    D)  Arbitrage

    E)  Absolute

    Correct Answer: A

    Solution :

     Capital Adequacy Ratio (CAR), also known as Capital to Risk (Weighted) Assets Ratio (CRAR), is the ratio of a bank's capital to its risk. It is expressed as a percentage of a bank's risk weighted credit exposures. \[\text{CAR=}\frac{\text{Tier One Capital + Tier Two Capital}}{\text{Risk Weighted Assets}}\]


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