Risk-weighted assets (RWA) are a measure of a bank's total assets where each asset is assigned a specific weight based on its risk level. This ensures banks hold more capital against riskier assets.
Banking regulators like Bangladesh Bank assign risk weights to different asset categories following Basel III rules.
For example, cash and government bonds typically carry a 0% risk weight — meaning 100 taka in government bonds counts as 0 taka in RWA. Corporate loans may carry a 100% weight — so 100 taka in corporate loans counts as 100 taka in RWA.
Bangladesh Bank calculates RWA across three risk categories following international Basel norms: credit risk, market risk, and operational risk.