Impact Factors On Capital Adequacy Ratio In Bank Of India Under Basel Ii & Iii

Authors

  • Dr. M. Kochadai, R. Aroquiadasse

Abstract

Risks to a bank are responsible for an adverse impact on the Capital and Key Ratios. The financial ratios
play an important role in deciding the strength of a bank over the years. The study has been carried out
to observe the impact of Capital Adequacy Ratio on few financial ratios of Bank of India, a Public
Sector Bank in India during Basel II and III periods covering from 2008-09 to 2019-20. The relationship
between the Capital Adequacy Ratio and Return Ratios’ is explained in this present study. Correlation
Regression Analysis and Durbin Watson Statistical model were applied to check serial correlation of
residuals, if any, exits. Return on Equity (ROE), Return on Assets (ROA), Non Performing Assets
(NPA) have negative impact on Capital Adequacy Ratio (CAR), whereas Current Account Saving
Account Deposit Ratio (CASA), Loan Asset Ratio (LAR), Equity Ratio (EQR) have positive impact on
Capital Adequacy Ratio.

Published

2020-11-01

Issue

Section

Articles