What is capital adequacy framework?

Risk Management

Adequate capital is required by banks to absorb any losses that arise during the normal course of the bank’s operations. Each Capital contribution/Equity contribution is a contribution of capital, in the form of money or property, to a business by an owner, partner, or shareholder.  The capital adequacy frame work in banking business emphasizes adequate…

What is capital account convertibility (CAC)?

Foreign Exchange

Capital Account Convertibility means that the currency of a country can be converted into foreign exchange without any controls or restrictions. The Report of the Tarapore Committee on Capital Account Convertibility (1997) provided the following working definition of CAC: “freedom to convert local financial assets into foreign financial assets and vice versa at market determined…