July 21, 2014 / 12:46 PM / in 4 years

India cbank panel issues proposals for lenders' counter cyclical buffers

MUMBAI, July 21 (Reuters) - A Reserve Bank of India panel proposed on Monday that counter cyclical capital buffers for banks consist of only common equity Tier 1 capital and be gradually raised to 2.5 percent of lenders’ risk weighted assets.

In its final report, the central bank panel also recommended that bad loans, credit to gross domestic product ratio and incremental credit deposit ratio be used as indicators to decide the counter cyclical capital buffer.

Any final decision on capital buffers could be announced four quarters ahead, the RBI said.

For full report, see: bit.ly/1jRyAt3 (Reporting by Suvashree Dey Choudhury; Editing by Rafael Nam)

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