Capital Adequacy Gaps for Banks-Problems and Prospects

Problems and Prospects K Satyanarayana This paper attempts to analyse the capital adequacy position of all the public sector banks and a sample of 14 private sector banks. Both the apparent and real financial positions of these banks are brought out with the help of a few visible ratios. The author also estimates the capital adequacy gap for each of the banks in terms of the time schedule prescribed by the RBI for 1994 and 1996 and analyses the possible options available to them.