**Policy Summary: RBI Circular DOR.BP.BC.No.4521/21.06.201/2019-20 dated March 27, 2020**
This circular, issued by the Reserve Bank of India (RBI) to all Scheduled Commercial Banks (excluding RRBs and LABs), announces a deferral in the implementation of the final tranche of the Capital Conservation Buffer (CCB) as part of Basel III capital regulations.
Specifically, the implementation of the last tranche of 0.625% of the CCB is postponed from March 31, 2020, to September 30, 2020. Consequently, the minimum capital conservation ratios outlined in para 15.2.2 of Part D of Master Circular DBR.No.BP.BC.1/21.06.201/2015-16 dated July 1, 2015, which were applicable from March 31, 2019, will continue to apply for an additional six months, until the CCB reaches the 2.5% level on September 30, 2020.
Furthermore, the pre-specified trigger for loss absorption through conversion/write-down of Additional Tier 1 instruments (PNCPS and PDIs) will remain at 5.5% of Risk-Weighted Assets (RWAs) and will increase to 6.125% of RWAs on September 30, 2020.
For further information, contact Saurav Sinha, Chief General Manager-in-Charge.
Key Entities Referenced
Basel III Capital Regulations: A set of international banking regulations
Capital Conservation Buffer (CCB): A capital buffer designed to ensure that banks maintain a sufficient level of capital
Reserve Bank of India (RBI): The central bank of India
All Scheduled Commercial Banks Excluding RRBs and LABs: The target audience of this circular
September 30, 2020: The revised date for implementation of the last tranche of the Capital Conservation Buffer
March 31, 2020: The original date for implementation of the last tranche of the Capital Conservation Buffer
Additional Tier 1 instruments (PNCPS and PDI): Specific types of capital instruments that are subject to loss absorption rules
Saurav Sinha: Chief General Manager-in-Charge at RBI, as indicated by the signature
RBI/2019-20/188
DOR.BP.BC.No.45/21.06.201/2019-20 March 27, 2020
All Scheduled Commercial Banks (Excluding RRBs and LABs)
Dear Sir/Madam,
Basel III Capital Regulations- Review of transitional arrangements
As announced in para 9 of the Statement on Developmental and Regulatory Policies issued
along with the Seventh Bi-monthly Monetary Policy Statement 2019-20, the implementation of
the last tranche of 0.625% of Capital Conservation Buffer (CCB) shall stand deferred from
March 31, 2020 to September 30, 2020.
2. Accordingly, minimum capital conservation ratios in para 15.2.2 of Part D ‘Capital
Conservation Buffer Framework’ of Master Circular, DBR.No.BP.BC.1/21.06.201/2015-16
dated July 1, 2015 on ‘Basel III Capital Regulations’, as applicable from March 31, 2018, will
also apply for a further period of six months from March 31, 2020 till the CCB attains the level
of 2.5% on September 30, 2020.
3. Further, the pre-specified trigger for loss absorption through conversion / write-down
of Additional Tier 1 instruments (PNCPS and PDI) shall remain at 5.5% of RWAs and will rise
to 6.125% of RWAs on September 30, 2020.
Yours faithfully
(Saurav Sinha)
Chief General Manager-in-Charge