IBANK 3.3.5 Counter-Cyclical Capital Buffer

(1) If imposed by the Regulatory Authority, the counter-cyclical capital buffer would require a firm to have additional CET 1 capital against possible future losses from system-wide risks such as excess credit growth.
(2) The Regulatory Authority may, by written notice, require Islamic banking business firms to have additional CET 1 capital as a countercyclical capital buffer. The buffer set by the authority will not exceed 2.5% of total risk-weighted assets.
(3) The Regulatory Authority will notify firms of any decision to set, or increase, a counter-cyclical capital buffer within a reasonable period of not more than 1 year before the date when the decision takes effect. However, a decision to remove or decrease a counter-cyclical capital buffer will take effect immediately.
(4) If a counter-cyclical capital buffer applies to a firm, the capital conservation ratios (and capital distribution restrictions) in rule 3.3.3 apply to the firm as if its minimum capital conservation buffer were increased by the amount of the counter-cyclical capital buffer.
Derived from QFCRA RM/2015-2 (as from 1st January 2016).