Multiple choice

The letter C in the rating model CAMELS being used by RBI for rating public sector banks represents

  1. capital fund

  2. capital adequacy

  3. capital contributed to subsidiaries

  4. credit limit

  5. consumer credit
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

CAMELS is a supervisory rating framework used by RBI to evaluate banks' overall condition. The acronym C-A-M-E-L-S stands for Capital Adequacy, Asset Quality, Management, Earnings, Liquidity, and Sensitivity to market risk. The 'C' specifically represents Capital Adequacy, which measures a bank's capital relative to its risk-weighted assets.

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