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Consider the following statements

Consider the following statements:

1.Capital Adequacy Ratio (CAR) is the amount that banks have to maintain in the form of their own funds to offset any loss that banks incur if any account-holders fail to repay dues.
2.CAR is decided by each individual bank.

Which of the statements given above is/are correct?

(a)

1 only

(b)

2 only

(c)

Both 1 and 2

(d)

Neither 1 nor 2

Explanation

Statement 1 is correct. https://economictimes.indiatimes.com/definition/capital-adequacy-ratio. Statement 2 is incorrect. CAR is decided by central bank and not by indivisual bank. Source: https://economictimes.indiatimes.com/definition/capital-adequacy-ratio