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RBI Contingent Risk Buffer: Range Review and Surplus Link

19 May 20251 min read
ECONOMYRBI ContingentRisk Buffer: RangeReview andSurplus Link19 May 2025safalsetu.com

Why in the news

The RBI Central Board reviewed the ECF and asked the government to approve a wider CRB band, citing vulnerabilities and macroeconomic swings.

Key facts

  • Framework: CRB belongs to the Economic Capital Framework from the Bimal Jalan Committee.
  • Link: higher CRB gives lower transferable surplus; lower CRB gives higher.

Significance

  • Acts as a safety net and gives the RBI flexibility.
  • Affects government finances, RBI risk-taking and market confidence.

Exam angle

  • Reviewing body: RBI Central Board.

Test yourself

1. What is the current range of the RBI's Contingent Risk Buffer?

The notes put the CRB range at 5.5% to 6.5% of the balance sheet.

2. If the RBI maintains a higher CRB, what happens to its surplus transfer to the government?

Higher CRB means lower transferable surplus.

3. The Contingent Risk Buffer is a component of which framework?

The CRB is part of the ECF based on Bimal Jalan Committee recommendations.

This topic is part of Daily Current Affairs 18 & 19 May 2025 (20 topics).

All topics of the dayDay quizMay 2025

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