COUNTERCYCLICAL CAPITAL BUFFER (CCyB)

For dealing with the coronavirus-led slowdown, the Reserve Bank of India (RBI) announced that banks don’t need to activate countercyclical capital buffers (CCyB) for one more year, which means the banks can utilize the capital earmarked for the buffer.



About:

  1. The framework on countercyclical capital buffer (CCyB) was put in place by the RBI in terms of guidelines issued in 2015 wherein it was advised that the CCyB would be activated as and when the circumstances warranted.

  2. The framework envisages the credit-to-GDP gap as the main indicator, which is used in conjunction with other supplementary indicators.

  3. It requires banks to build up a buffer of capital in good times, which may be used to maintain flow of credit to the real sector in difficult times.

  4. The buffer was also meant to restrict the banking sector from indiscriminate lending in the periods of excess credit growth, which have often been associated with the building up of system-wide risk.

  5. Based on the review and empirical analysis of CCyB indicators, it has been decided that it is not necessary to activate CCyB for a period of one year or earlier, as may be necessary.

Source : LiveMint

Vignan IAS Academy imparts Best IAS coaching in Bangalore for Civil Services. VIA team of mentors (teachers), with long years of experience in teaching as well as expertise in our specific subject-matter expertise. Our team has been exposed to exclusive IAS coaching’s in Bangalore, has created value for those coaching institutes.

  • Facebook
  • Twitter
  • Pinterest
  • YouTube
  • LinkedIn
google-icon-png-9.png
whatsapp.png

ABOUT VIGNAN IAS

ALL COURSES

- Why Vignan IAS?

- About Us

- How to choose Best IAS

- Coaching in Bangalore?

- Key Features

9606576465

- Intensive IAS

- CSAT-Prelims

- Mains

- Public Admins Optional

- Economics Optional

HELPFUL LINKS

- Current Affairs

- Daily News Analysis

- Books

- UPSC Syllabus

- UPSC Notifications

- Eligibility Criteria

- Study Material

- How to Prepare?

Copy rights All rights reserved by Vignan IAS Academy