---
title: "RBI decides against imposing additional capital buffer on banks"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/286783454.md"
description: "The Reserve Bank of India (RBI) has decided not to activate the countercyclical capital buffer (CCyB), stating that current conditions do not necessitate it. The CCyB is intended to be activated when systemic risks from excess credit growth arise. The RBI emphasized that the framework aims to ensure banks build capital during economic expansions and to prevent excessive lending that could lead to systemic risks."
datetime: "2026-05-18T05:54:29.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/286783454.md)
  - [en](https://longbridge.com/en/news/286783454.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/286783454.md)
---

# RBI decides against imposing additional capital buffer on banks

The Reserve Bank of India (RBI) on Monday said it has decided against activating the countercyclical capital buffer (CCyB), saying prevailing conditions do not warrant the move at this stage.

Under the framework on CCyB laid out in the RBI (Commercial Banks – Prudential Norms on Capital Adequacy) Directions, 2025, the buffer is to be activated when systemic risks arising from excess credit growth begin to build up. The central bank said such decisions would normally be pre-announced.

“The framework envisages the credit-to-GDP gap as the main indicator, which may be used in conjunction with other supplementary indicators. Based on review and empirical analysis of CCyB indicators, it has been decided that it is not necessary to activate CCyB at this point in time,” the RBI said in a statement.

The RBI said the CCyB framework serves two broad objectives. First, it requires banks to build additional capital buffers during periods of economic expansion, which can later be drawn down to maintain the flow of credit during periods of stress. Second, it seeks to curb indiscriminate lending during phases of excessive credit growth that could lead to the build-up of systemic risks in the banking sector.

The concept of countercyclical capital measures emerged in the aftermath of the 2008 global financial crisis, when the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of the Basel Committee on Banking Supervision, proposed the framework as part of broader post-crisis banking reforms.

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