How the bank is judged
Capital adequacy (CRAR): the cushion that keeps a bank standing
The bank's own capital measured against its risk-weighted assets — the cushion before depositors are touched.
Why it matters
CRAR explains why the bank sometimes prefers safe secured loans over juicy unsecured ones — capital, not just yield, is in play.
A worked example
The same ₹1 cr lent unsecured ties up ~3× the capital of a home loan; India's minimum CRAR is ~11.5%.
The picture
What it leads to
CRAR is the brake on the leverage that powers ROE — it stops a bank chasing returns by stacking risk without a cushion.
Where it sits in the map
Follow the causation