Breaking News

You are here » Indian-Commodity  :  Top News  :  RBI defers implementation of last tranche of CCB by a year


RBI defers implementation of last tranche of CCB by a year

With an aim to reduce the burden of public sector banks (PSBs), the Reserve Bank of India (RBI) has deferred the implementation of the last tranche of Capital Conservation Buffer (CCB) by a year. This move will leave about estimated Rs 37,000 crore capital in the hands of banks. This will help PSBs increase lending by over Rs 3.5 lakh crore by leveraging ten times of the capital.

The Central Bank deferred the implementation of the last tranche of 0.625 percent of CCB from March 31, 2019 to March 31, 2020.  As a result, minimum capital conservation ratios of 2.5 percent will be applicable from on March 31, 2020. Currently, the CCB of banks stands at 1.875 percent of the core capital.

The RBI further highlighted that the pre-specified trigger for loss absorption through conversion or write-down of additional tier 1 instruments will remain at 5.5 percent of risk-weighted asset (RWA) and will rise to 6.125 percent of RWAs on March 31, 2020. However, it decided to retain the capital adequacy ratio or CRAR at 9 percent.

Besides, the CCB is the capital buffer that banks have to accumulate in normal times to be used for offsetting losses during periods of stress. It was introduced after the 2008 global financial crisis to improve the ability of banks to withstand adverse economic conditions.

Related News

View all news

Crude oil futures end lower on Monday

Crude oil futures ended lower on Monday as steep declines in the US stock market fed an aversion to so-called riskier assets, which include oil. Meanwhile, the US-China trade dispute escalated as China......

Gold futures trade flat on Monday

Gold futures was trading flat on Monday as growing uncertainty over whether the United States and China will be able to reach a deal to end their escalating trade war fueled safe-haven demand for the precious......

Jeera futures trade higher on rising demand

Jeera futures traded higher on NCDEX on the back of rising physical and export demand at the spot market. However, higher availability of crop this season, capped some gains.The contract for May delivery......

Top News

View all news

SRF, NIIT Technologies and United Bank of India to see some action today

SRF has entered into a definitive agreement to sell its Engineering Plastics Business to DSM, the Life Sciences and Materials Sciences Company in an all-cash transaction, amounting to Rs 320 crore. The......

NIIT Technologies concludes sale of 88.99% stake in ESRI India Technologies

NIIT Technologies has concluded the sale of 88.99% equity shares in ESRI India Technologies, India to Environment Systems Research Institute Inc., USA. Consequent to above sale, ESRI India Technologies,......

United Bank of India to raise Rs 1,500 crore by various means

United Bank of India has received approval to raise equity capital not exceeding Rs 1,500 crore in one or more tranches during the financial year by way of Qualified Institutions Placement, Public Issue,......