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Three measures to gauge a bank's financial health

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₹25,000 per depositors, with exceptions such as medical emergencies in which case the limit is ₹5 lakh per person. While such moratoriums are rare and come as a surprise, the bank's financial parameters have been available in the public domain.

In this piece we look at what are the metrics to look for to gauge a bank’s financial health. These are metrics are easily available in quarterly results uploaded on a bank's website.Capital Adequacy RatioThis data point captures the buffer a bank has against bad loans.

When defaults happen, the losses are absorbed by the bank’s capital rather than that of depositors' and this reading reveals the extent of the loss absorption capacity available with a lender. "A ratio above 12% connotes a healthy.

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