CRAR Full Form

CRAR Full Form

CRAR full form is Capital to Risk Asset Ratio. In simple words it's is a ratio of a banks capital to it's risk. CRAR is helpful to protect the depositors and promote the stability and efficiency in financial system.

CRAR is arrived by dividing the capital of the bank with the risk-weighted assets for credit risk, market risk, and operational risk. Indian banks need to maintain a capital to risk-weighted asset ratio (CRAR) of 9% expected by the Reserve Bank of India.

CRAR is calculated by adding a bank’s tier 1 capital plus tier 2 capitals and by dividing the total by its total risk-weighted assets.


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