RBI extends deadline for meeting last tranche of capital conservation buffer by

[NiveRoshni]

RBI extends deadline for meeting last tranche of capital conservation buffer by 6 months



The Reserve Bank of India on Friday extended the deadline for meeting the last tranche of capital conservation buffer (CCB) by another six months till October this year due to continuing stress on account of COVID-19 pandemic.

As part of the regulatory measures taken in the wake of COVID-19, the implementation of the last tranche of the CCB of 0.625 percent, which was scheduled to take effect from April 1, 2020, was deferred till April 1, 2021.

"Considering the continuing stress on account of COVID-19, and in order to aid in the recovery process, it has been decided to defer the implementation of the last tranche of the CCB of 0.625 per cent from April 1, 2021 to October 1, 2021," RBI Governor Shaktikanta Das said.

The capital conservation buffer ensures that banks have an additional layer of usable capital that can be drawn down when losses are incurred.

As per Basel standards, the CCB was to be implemented in tranches of 0.625 percent and the transition to full CCB of 2.5 percent was set to be completed by March 31, 2019.

It was introduced after the 2008 global financial crisis to improve the ability of banks to withstand adverse economic conditions.

It was one of the sore points between RBI and the government during 2018.

Following the change of guard at the central bank, it was decided to defer it by a year till March 2020.

Source : https://www.moneycontrol.com/news/business/economy/rbi-extends-deadline-for-meeting-last-tranche-of-capital-conservation-buffer-by-6-months-6456561.html/amp