The first statement is correct because the Capital Adequacy Ratio (CAR) is indeed a regulatory standard that ensures banks maintain a minimum level of capital to absorb potential losses, thereby safeguarding depositors' interests and ensuring the stability of the financial system. The second statement is incorrect because CAR is not determined by individual banks but is set by regulatory authorities, such as the Reserve Bank of India (RBI) or the Basel Committee on Banking Supervision, to ensure uniformity and financial stability across the banking sector. This understanding of CAR is vital for assessing banking regulations and the health of financial institutions in the context of economic stability, a key focus in UPSC examinations.