What is CRAR?What is CCB?

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CRAR stands for Capital to Risk-Weighted Assets Ratio, a measure of a bank's capital adequacy. CCB stands for Counter-Cyclical Buffer, an additional capital requirement imposed on banks during periods of excessive credit growth.

CRAR is calculated by dividing a bank's capital by its risk-weighted assets.
It is used to ensure that banks have enough capital to cover potential losses from their risk exposures.
CCB is a regulatory tool used by central banks to build up additional capital during periods of excessive credit growth.
It is designed to protect the banking sector from systemic risks during economic booms.
For example, the Reserve Bank of India implemented a CCB of 0.25% in 2019 to address the build-up of systemic risks in the banking sector.

What is CRAR?What is CCB?

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