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It determines the bank’s capacity to meet the time liabilities and other risk, which helps to protect the bank’s depositors and other lenders. CAR is also known as capital to Risk(Weighted) Asset ratio(CRAR) is the ratio of a Bank’s capital to its risk
CAR is the amount of capital any bank holds vis-a-vis its measured credit, market and operational risk. It is also known as Capital to Risk weighted Assets ratio. CAR measures a bank's risk of insolvency from excessive losses.
