February 5, 2015 / 12:27 PM / 3 years ago

RBI announces framework for banks' countercyclical capital buffer

MUMBAI (Reuters) - 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.

A worker cleans the stairs of the Reserve Bank of India (RBI) building in Kolkata December 18, 2013. REUTERS/Rupak De Chowdhuri/Files

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 percent of the total risk weighted assets of banks.

For the full circular, please see: bit.ly/1F9cuIQ

Reporting by Neha Dasgupta and Devidutta Tripathy; Editing by Prateek Chatterjee

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