Bird
0
0

Capital adequacy ratio under Basel norms is maintained mainly to:

medium Q5 of 15
Banking Awareness - Banking Acts, Reforms & Risk Management
Capital adequacy ratio under Basel norms is maintained mainly to:
AProtect banks against unexpected losses
BIncrease lending speed
CEnsure higher dividends
DReduce customer deposits
Step-by-Step Solution

  1. Step 1: Understand the role of capital

    Capital serves as a safety buffer.

  2. Step 2: Link with adequacy purpose

    It absorbs losses during financial stress.

  3. Final Answer:

    Protect banks against unexpected losses → Option A

  4. Quick Check:

    Capital cushion protects banks in crises ✅
Quick Trick: Capital adequacy = loss absorption.
Common Mistakes:
MISTAKES
  • Linking capital adequacy with profitability goals.
Master "Banking Acts, Reforms & Risk Management" in Banking Awareness

Start learning the concept with an interactive lesson.

Learn

Want More Practice?

15+ quiz questions · All difficulty levels · Free

Free Signup - Practice All Questions
More Banking Awareness Quizzes
Banking Acts, Reforms & Risk Management - Deposit Insurance & Credit Guarantee (DICGC) - Quiz 1easy Banking Acts, Reforms & Risk Management - Types of Banking Risks - Quiz 5medium Banking Acts, Reforms & Risk Management - SARFAESI Act (Basic Understanding) - Quiz 7medium Banking Acts, Reforms & Risk Management - Bank Mergers & Consolidation - Quiz 15medium Banking Acts, Reforms & Risk Management - Risk Management Framework in Banks - Quiz 10hard Banking Acts, Reforms & Risk Management - SARFAESI Act (Basic Understanding) - Quiz 15medium Banking Acts, Reforms & Risk Management - Banking Regulation Act, 1949 - Quiz 8hard Banking Acts, Reforms & Risk Management - Banking Regulation Act, 1949 - Quiz 15medium Banking Acts, Reforms & Risk Management - SARFAESI Act (Basic Understanding) - Quiz 5medium Banking Acts, Reforms & Risk Management - Deposit Insurance & Credit Guarantee (DICGC) - Quiz 4medium