RBI will not activate CCyB after reviewing key risk signals
Business
The Reserve Bank of India (RBI) just announced it won't activate the countercyclical capital buffer (CCyB) for banks right now.
After checking key risk signals (like the credit-to-GDP gap), the RBI decided it is not necessary to activate the countercyclical capital buffer at this point in time.
CCyB triggers when lending outpaces GDP
Think of the CCyB as a safety net: introduced in the 2025 framework, it makes banks save up more capital during good times so they're ready if things get rough.
The main trigger is when lending grows much faster than the economy itself.
RBI's move aligns with the framework envisaged in the backdrop of the 2008 financial crisis, keeping our banking system steady without unnecessary stress.