What do you mean by Prudential Norms/Regulation – Prudential regulation refers to a set of laws and rules designed to minimise the risks banks assume and to ensure the safety and soundness of both individual institutions and the system as a whole. Prudential regulation has been characterised by inserting best practices as defined by the Basel capital accord into Indian banking. Examples of prudential regulation include lending limits, minimum capital adequacy guidelines, liquidity ratios etc. The CAR, CRAR, etc are part of prudential regulation.
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