Money & Banking

CRAR, standard to measure a bank’s financial health: Karnataka Bank MD

A J Vinayak Mangaluru | Updated on March 11, 2020

Mahabaleshwara MS, MD and CEO of Karnataka Bank, has said that the health of a bank is measured by referring to the Capital to Risk Weighted Assets Ratio (CRAR) and not the so-called ‘M-Cap to Deposit Ratio’.

Reacting to a recent report by a television channel, which was widely circulated in social media, he categorically denounced the ‘M-Cap Ratio’ used by the channel to measure the health of banks.

In a press statement on Wednesday, he said that Krishnamurthy Subramanian, the Chief Economic Advisor to the government, the Governor of RBI, and the Chairman of SBI have categorically endorsed the views that CRAR ratio is used globally for assessing the health of banks and that banks in India are well capitalised and, therefore, are safe and healthy.

Stating that the CRAR of Karnataka Bank stood at 13.17 per cent, as on March 31 2019, he said this is well above the minimum regulatory prescription.

“The bank’s internal policy stipulates maintaining CRAR of at least 1 per cent above the regulatory requirement. We have been consistently maintaining CRAR above the minimum prescribed by the RBI,” he said.

Published on March 11, 2020

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