Capital to Risk-weighted Assets Ratio (CRAR)
The RBI requires banks to maintain a minimum CRAR of 9 per cent on an ongoing basis. The Master Circular on Capital Adequacy contains detailed guidelines on calculation of risk weighted assets and off-balance sheet items and CRAR.
The CRAR is computed as follows:
Eligible Total Capital funds × 100
Credit Risk RWA + Market Risk RWA + Operational Risk RWA
The minimum CRAR is required to be maintained at consolidated level also as per Basel III guidelines. The requirements mentioned above relates to standalone Bank only. For the requirement for the consolidated capital, the readers may refer the Master Circular on Basel III Capital Regulations.