Photo: BIGSTOCKThe capital adequacy ratio (CAR) of the banking industry stood at 11.6% at the end of December 2019, which was 10.5% year agoBanking sector in Bangladesh has maintained the lowest capital adequacy ratio (CAR) than other South Asian countries-India, Pakistan and Sri Lanka– says the Bangladesh Bank’s Financial Stability Report-2019. The stability report says the capital adequacy ratio (CAR) of the banking industry stood at 11.6% at the end of December 2019, which was 10.5% year ago. Last year, the banking industry in Bangladesh maintained 11.6% CAR, while neighboring India maintained 15.1% CAR; Pakistan maintained 17.0% CAR and Sri Lanka maintained 16.5% CAR. Low capital adequacy ratio discourages them from investing. According to the BB guidelines on risk-based capital adequacy, banks have to maintain a minimum capital adequacy ratio (CAR)—which is a bank’s capital reserve to cover their risk exposure—of 12.50% by 2019, in line with the BASEL III requirement.

Source: Dhaka Tribune July 05, 2020 10:52 UTC