India central bank announces framework for banks' countercyclical capital buffer

[MUMBAI] The Reserve Bank of India announced a framework for banks to maintain a countercyclical buffer in the form of common equity tier I capital, in a bid to ensure streamlined flow of credit in times of stress.

However, maintenance of the buffer is not required now even as the framework kicks in with immediate effect, the RBI release stated.

The RBI said the buffer may vary from zero to 2.5 per cent of the total risk weighted assets of banks.


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