{"id":363226,"date":"2026-05-20T15:37:21","date_gmt":"2026-05-20T10:07:21","guid":{"rendered":"https:\/\/forumias.com\/blog\/?p=363226"},"modified":"2026-05-20T15:37:21","modified_gmt":"2026-05-20T10:07:21","slug":"countercyclical-capital-buffer-ccyb-for-banks","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/countercyclical-capital-buffer-ccyb-for-banks\/","title":{"rendered":"Countercyclical Capital Buffer (CCyB) for Banks"},"content":{"rendered":"<div class=\"content-box-green\">\n<p style=\"text-align: justify;\"><b>News:<\/b><span style=\"font-weight: 400;\"> The Reserve Bank of India has said it will not activate the countercyclical capital buffer (CCyB) as the measure is not required in the current circumstances.<\/span><\/p>\n<\/div>\n<h2 class=\"red-h2-box\" style=\"text-align: justify;\"><b>About Countercyclical Capital Buffer (CCyB) for Banks<\/b><\/h2>\n<figure style=\"width: 300px\" class=\"wp-caption aligncenter\"><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" src=\"https:\/\/i0.wp.com\/img.etimg.com\/thumb\/msid-131178266%2Cwidth-300%2Cheight-225%2Cimgsize-102886%2Cresizemode-75\/not-activating-countercyclical-capital-buffer-says-rbi.jpg?resize=300%2C224&#038;ssl=1\" alt=\"Countercyclical capital buffer\" width=\"300\" height=\"224\" \/><figcaption class=\"wp-caption-text\">Source: Economic times<\/figcaption><\/figure>\n<ul>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\"><strong>Countercyclical Capital Buffer (CCyB) for Banks<\/strong> is a <strong>macro-prudential tool<\/strong> that requires <strong>banks to build up additional capital<\/strong> during <strong>periods of excessive credit growth.<\/strong><\/span><\/li>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">It is part of the <strong>Basel III norms<\/strong> to build <strong>resilience during credit booms<\/strong>.<\/span><\/li>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\"><strong>How it was introduced:<\/strong> In the backdrop of the<\/span><b> 2008 global financial crisis, the Group of Central Bank Governors and Heads of Supervision (GHOS), <\/b><span style=\"font-weight: 400;\">the overseeing body of the standards set by the Basel Committee<\/span><b>, envisaged the introduction of a framework on countercyclical capital measures.<\/b><\/li>\n<li style=\"text-align: justify;\"><b>Aim:<\/b><span style=\"font-weight: 400;\"> The aim of the Countercyclical Capital Buffer <strong>is two fold &#8211;\u00a0<\/strong><\/span>\n<ul>\n<li><span style=\"font-weight: 400;\">It requires a<\/span><b> bank to build up a buffer of capital in good times<\/b><span style=\"font-weight: 400;\">, which may be <strong>used to maintain the flow of credit<\/strong> to the real sector <strong>in<\/strong> <strong>difficult times.<\/strong><\/span><\/li>\n<li><span style=\"font-weight: 400;\">It achieves the<\/span><b> broader macro-prudential goal of restricting the banking sector from indiscriminate lending in the periods of excess credit growth <\/b><span style=\"font-weight: 400;\">that have often been associated with the building up of system-wide risk.<\/span><\/li>\n<\/ul>\n<\/li>\n<li><b>Framework on countercyclical capital buffer (CCyB):<\/b><span style=\"font-weight: 400;\"> As per the framework on countercyclical capital buffer (CCyB) laid out in the<\/span><b> RBI (Commercial Banks &#8211; Prudential Norms on Capital Adequacy) Directions, 2025, <\/b><span style=\"font-weight: 400;\">CCyB <strong>would be activated<\/strong> as and when <strong>circumstances warranted<\/strong>, and the decision would normally be <strong>pre-announced.<\/strong><\/span>\n<ul>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">The framework envisages<\/span><b> the credit-to-GDP gap as the main indicator<\/b><span style=\"font-weight: 400;\">, which may be used in conjunction with other supplementary indicators.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>News: The Reserve Bank of India has said it will not activate the countercyclical capital buffer (CCyB) as the measure is not required in the current circumstances. About Countercyclical Capital Buffer (CCyB) for Banks Countercyclical Capital Buffer (CCyB) for Banks is a macro-prudential tool that requires banks to build up additional capital during periods of&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/countercyclical-capital-buffer-ccyb-for-banks\/\">Continue reading <span class=\"screen-reader-text\">Countercyclical Capital Buffer (CCyB) for Banks<\/span><\/a><\/p>\n","protected":false},"author":10366,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1566,3127,12039],"tags":[11872,12085],"class_list":["post-363226","post","type-post","status-publish","format-standard","hentry","category-daily-factly-articles","category-economy","category-knolls","tag-9pm-daily-factly","tag-news-on-air","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/363226","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10366"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=363226"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/363226\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=363226"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=363226"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=363226"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}