[amp_mcq option1=”12%” option2=”10%” option3=”9%” option4=”11%” correct=”option1″]
The correct answer is A. 12%.
The capital adequacy ratio (CAR) is a measure of a bank’s financial health. It is calculated by dividing a bank’s capital by its risk-weighted assets. The CAR is a regulatory requirement that banks must maintain a certain level of capital in order to protect themselves against losses.
The RBI has fixed the minimum CAR for banks at 12%. This means that banks must have at least 12% of their assets in the form of capital. The capital can be in the form of equity, retained earnings, or subordinated debt.
The CAR is an important tool for ensuring the stability of the banking system. By requiring banks to maintain a certain level of capital, the CAR helps to protect depositors and the financial system as a whole.
Option B is incorrect because the minimum CAR is 12%, not 10%.
Option C is incorrect because the minimum CAR is 12%, not 9%.
Option D is incorrect because the minimum CAR is 12%, not 11%.