Home › Dashboards › Capital Adequacy (CRAR)
Capital Adequacy (CRAR) of Indian banks — Basel III minimums in numbers
IndicativeFigures on this page are indicative and pending expert verification by Vikram Jain (CA) — not yet admitted to the BankPulse Verified-numbers ledger.
Quick answerCRAR (the Capital to Risk-weighted Assets Ratio) is how much loss-absorbing capital a bank holds against its risk-weighted assets. India’s scheduled commercial banks run a system CRAR of about 16.8-17% — roughly 5-6 percentage points above the 11.5% effective minimum (a 9% minimum CRAR plus a 2.5% Capital Conservation Buffer) under the RBI’s Basel III framework. Core CET1 capital is ~13-14%, private banks (~17-18%) hold thicker buffers than public-sector banks (~15-16%), and the three D-SIBs (SBI, HDFC Bank, ICICI Bank) carry an extra surcharge. It is the strongest capital position in over a decade. Figures are official, rounded and approximate.
The chart shows the system-wide CRAR of scheduled commercial banks since 2018, against the 11.5% effective regulatory minimum. The table below carries the same figures so the page is readable without JavaScript — for accessibility and AI answer engines.
System CRAR of scheduled commercial banks (%), by year
| As of | CRAR (%, approx.) | Note |
| Mar 2018 | ~13.8% | Post-AQR stress and rising provisions; public-sector banks under recapitalisation |
| Mar 2019 | ~14.3% | Government recapitalisation of PSBs lifts buffers as the bad-loan cycle peaks |
| Mar 2020 | ~14.7% | Pre-COVID; banks build capital ahead of expected stress |
| Mar 2021 | ~16.3% | Sharp rise — capital raises, retained profits and a benign credit-cost cycle |
| Mar 2022 | ~16.8% | Profitability rebound and clean balance sheets push buffers to multi-year highs |
| Mar 2023 | ~17.1% | Strong earnings and low slippages keep capital comfortably above minimums |
| Mar 2024 | ~16.8% | Brisk credit growth lifts risk-weighted assets; CRAR stays well above 11.5% |
| Mar 2025 | ~17.2% | Indicative / provisional — buffers remain near record highs (pending confirmation) |
All figures are rounded and approximate; the latest year is indicative/provisional. None of these figures is in the BankPulse Verified-numbers ledger pending reviewer sign-off. For exact figures see the source linked below.
Headline capital metrics (latest, approximate)
| Metric | Value | What it means |
| System CRAR (all SCBs) | ~16.8-17% | Total capital to risk-weighted assets of scheduled commercial banks — far above the 11.5% effective minimum |
| Common Equity Tier 1 (CET1) | ~13-14% | The highest-quality core capital (paid-up equity + reserves) as a share of risk-weighted assets — the most-watched gauge of loss absorption |
| Tier 1 capital ratio | ~14-15% | CET1 plus Additional Tier 1 (perpetual) instruments — the going-concern capital that absorbs losses while the bank operates |
| Public-sector banks CRAR | ~15-16% | PSBs after recapitalisation — lower than private banks but comfortably above the minimum |
| Private-sector banks CRAR | ~17-18% | Private banks carry the thickest buffers, supported by equity raising and high profitability |
| Headroom over minimum | ~5-6 pp | System CRAR runs roughly 5-6 percentage points above the 11.5% effective floor — a large cushion against shocks |
Values are rounded and approximate and not in the Verified-numbers ledger pending reviewer sign-off.
The Basel III minimum capital framework (RBI)
What the RBI requires every bank to hold. The effective minimum total CRAR is 11.5% — the 9% floor plus the 2.5% Capital Conservation Buffer — with extra add-ons for the biggest banks.
| Requirement | Level | Detail |
| Minimum Common Equity Tier 1 (CET1) | 5.5% | RBI sets CET1 at 5.5% of risk-weighted assets — higher than the 4.5% Basel III floor |
| Minimum Tier 1 capital | 7.0% | CET1 plus Additional Tier 1 (AT1) instruments such as perpetual bonds |
| Minimum total CRAR | 9.0% | Tier 1 plus Tier 2 capital — RBI's 9% is above the 8% Basel III minimum |
| Capital Conservation Buffer (CCB) | 2.5% | An extra CET1 buffer on top; breaching it restricts dividends and bonuses. Lifts the effective minimum CRAR to 11.5% |
| Effective minimum total CRAR | 11.5% | 9.0% minimum + 2.5% CCB — the level banks must hold in normal times to pay dividends freely |
| D-SIB surcharge | 0.20-0.80% | Extra CET1 for Domestic Systemically Important Banks — SBI, HDFC Bank and ICICI Bank carry a 'too-big-to-fail' add-on |
| Countercyclical Capital Buffer (CCyB) | 0% (currently) | A 0-2.5% buffer the RBI can switch on in credit booms; the framework exists but the rate is currently nil |
How to read CRARCRAR = capital ÷ risk-weighted assets. The numerator is loss-absorbing capital (CET1 + AT1 + Tier 2); the denominator weights each asset by risk — a sovereign bond near 0%, a home loan less than an unsecured corporate loan. A higher CRAR means a thicker cushion: at ~17% against an 11.5% floor, Indian banks could absorb a large jump in bad loans before breaching the minimum. Falling into the 2.5% Capital Conservation Buffer is not a breach of the 9% floor, but it automatically curbs dividends and bonuses until capital is rebuilt — which is why banks manage to the 11.5% effective level, not the bare 9%.
What counts as bank capital
Capital is layered by quality, from first-loss equity down to gone-concern debt.
| Component | Detail |
| Common Equity Tier 1 (CET1) | Paid-up equity shares, retained earnings and statutory reserves — the purest, first-loss-absorbing capital. Regulators watch CET1 most closely |
| Additional Tier 1 (AT1) | Perpetual, loss-absorbing instruments (e.g. AT1 / perpetual bonds) with no maturity; together with CET1 they form going-concern Tier 1 capital |
| Tier 2 capital | Supplementary 'gone-concern' capital — subordinated debt, certain provisions and revaluation reserves that absorb losses if the bank fails |
| Risk-weighted assets (RWA) | The denominator — each asset is weighted by its riskiness (a government bond ~0%, a retail loan and a corporate loan more), so CRAR = capital ÷ RWA |
| Leverage ratio | A non-risk-based backstop — Tier 1 capital to total exposure (RBI minimum 3.5-4%), stopping banks from gaming risk weights |
| Capital Conservation Buffer | An extra 2.5% CET1 layer banks build in good times and can draw down under stress; dipping into it triggers automatic curbs on payouts |
Regulatory milestones
| Date | Milestone |
| 2013 | RBI issues the Basel III Capital Regulations Master Circular; phased implementation begins from 1 April 2013 |
| 2015 | RBI designates the first Domestic Systemically Important Banks (D-SIBs) — SBI and ICICI Bank — with extra capital surcharges (HDFC Bank added later) |
| 2019 | Capital Conservation Buffer fully phased in at 2.5%, taking the effective minimum total CRAR to 11.5% (final tranche after a deferral) |
| 2018-2021 | Government recapitalisation of public-sector banks (over ~Rs 3 lakh crore via recap bonds and budget) rebuilds buffers through the bad-loan clean-up |
| 2024-2025 | System CRAR holds near record highs (~16.8-17%) even as bank credit grows briskly — the strongest capital position in over a decade |
What it means for bankers
Capital adequacy is the single number a regulator, rating agency and depositor look at first. For a banker the CRAR story has three arcs. First, resilience — a system CRAR near 17% against an 11.5% floor means the buffer can absorb a sharp rise in non-performing assets and the provisioning that follows without threatening solvency; read it together with the provision coverage ratio and the composite bank-health scores. Second, growth headroom — every new loan adds risk-weighted assets and consumes capital, so a thick CRAR is what lets banks keep up brisk credit growth; thin capital forces either equity raising or slower lending. Third, the payout constraint — the Capital Conservation Buffer ties dividends and buybacks to keeping CET1 above the line, and the D-SIB surcharge on SBI, HDFC Bank and ICICI Bank raises the bar for the most systemic banks. Capital adequacy is the supply-side of safety; the DICGC deposit guarantee is the backstop if it ever fails.
More live dataRelated BankPulse pages: NPA / Asset Quality · Provision Coverage Ratio · Bank Health Scores · RoA / RoE · Deposit Insurance (DICGC).
Capital Adequacy (CRAR) FAQ
What is CRAR (capital adequacy ratio) and what is the minimum in India?
CRAR — the Capital to Risk-weighted Assets Ratio — is a bank's capital divided by its risk-weighted assets, the core measure of how much loss it can absorb before depositors are at risk. Under the RBI's Basel III framework the minimum total CRAR is 9% (above the 8% Basel floor), plus a 2.5% Capital Conservation Buffer, so banks must effectively hold 11.5% in normal times to pay dividends freely. Within that, minimum CET1 is 5.5% and minimum Tier 1 is 7%. Figures are rounded and approximate.
How well capitalised are Indian banks now?
India's scheduled commercial banks have a system CRAR of roughly 16.8-17%, about 5-6 percentage points above the 11.5% effective minimum and the strongest in over a decade. CET1, the highest-quality capital, is around 13-14%. Private banks carry the thickest buffers (~17-18%) while public-sector banks, rebuilt by government recapitalisation, are around 15-16%. Figures are rounded and approximate.
What are the capital tiers and the D-SIB surcharge?
Bank capital is layered: CET1 (paid-up equity and reserves) is the purest first-loss capital; Additional Tier 1 (perpetual instruments) completes going-concern Tier 1; Tier 2 (subordinated debt and certain provisions) is gone-concern capital used if the bank fails. On top, Domestic Systemically Important Banks — in India SBI, HDFC Bank and ICICI Bank — carry an extra CET1 surcharge of roughly 0.20-0.80%. Figures are rounded and approximate.
Methodology & sources: see how BankPulse dashboards are sourced, verified & updated · machine-readable Capital Adequacy (CRAR) JSON feed.
Last reviewed by Vikram Jain
Source: RBI Financial Stability Report, Report on Trend & Progress of Banking in India and the Master Circular on Basel III Capital Regulations, rbi.org.in. CRAR, CET1, Tier 1 and bank-group figures are rounded and approximate, the latest year is indicative/provisional, and none is in the BankPulse Verified-numbers ledger pending reviewer sign-off. We never reproduce source text verbatim. Reviewed by Vikram Jain. Last updated 21 Jun 2026, 08:45 IST.
The short version: official source on every page · plain English, never verbatim · three-model AI consensus · Chartered-Accountant sign-off · web-grounded verified numbers · public corrections. See the six pillars on how we earn your trust.