CRAR-An analysis of financial soundness of selected public sector banks, private sector banks and foreign banks in India

Abstract

Banks are the strongest pillars of any economy. As their very nature of business like providing loans, Banks attract different types of default risks. Banks face credit risk, operational risk and market risk. In banks, Capital is crucial and vigorous to maintain the survival of bank. Capital Adequacy indicates that banks have adequate capital to maintain all of its liabilities and risks. So, capital adequacy requires in banks to build investors’ confidence and prevent bank from bankruptcy. In this present paper researcher analysed CRAR of selected Public Sector Banks, Private Sector Banks and Foreign Banks in India with an objective to compare within selected banks that which bank is highly adequate in terms of their capital management. The time period of the study is from 2008 to 2016. For objective of this study; tool and techniques are CAMELs criteria, rank and correlation. Banks are selected on the basis of market capitalization rate. This paper has resulted that ICICI bank is highly consistent in maintenance of CRAR.