RBI extends last tranche of capital conservation buffer until October

The Reserve Bank of India extended the implementation of the last tranche of the capital conservation buffer of 0.625%, as well as the final guidelines for the net stable funding ratio, by another six months until Oct. 1, citing the ongoing stress amid the COVID-19 pandemic.

The prespecified trigger for loss absorption through conversion or write-down of additional Tier 1 instruments will remain at 5.5% of risk-weighted assets and will increase to 6.125% of risk weighted assets from Oct. 1, the central bank said in a Feb. 5 notice.

In September 2020, the Indian central bank September a six-month deferral on the provisions under the Basel III framework as the COVID-19 pandemic continues to pose uncertainties.

The central bank also extended the marginal standing facility relaxation by six more months until Sept. 30 to provide comfort to banks on their liquidity requirements after announcing an extension in September 2020 from the original June 30, 2020 schedule. Under the relaxed regulations, lenders are allowed to avail of funds under the marginal standing facility by dipping into statutory liquidity ratio up to an additional 1% of their net demand and time liabilities.