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News: The Reserve Bank of India (RBI) has deferred implementation of countercyclical capital buffers (CCyB). RBI had put in place the framework on countercyclical capital buffer (CCyB) in 2015
Facts:
Capital Buffer:
- Mandatory capital that financial institutions are required to hold.
- They were mandated under the Basel III regulatory reforms, which were implemented following the 2007-2008 financial crisis.
Countercyclical Capital Buffer:
- Capital Buffer that banks need to hold when credit is growing rapidly. This buffer can be reduced if the financial cycle turns down or the economic and financial environment becomes poor
