The Capital Adequacy Ratio (CAR) of the banking sector, which was already well above the regulatory requirements; increased further to 15.4 percent in FY12. The solvency of the banking sector has improved due to robust profitability, fresh equity injections and decreasing Risk Weighted Assets (RWA) owing to riskaverse behavior.
Since 2012, the unemployment rate has fallen from five percent to less than four percent, close to the long-term average. Note that this improvement has occurred in conjunction with relatively stable labor force participation. Additional favorable factors are foreign remittances and consumer lending, exhibiting an almost coincident rebound with consumption.