Counter cyclical measures in respect of capital and provisioning were first taken on board in 2005 when risk weights and provisioning on certain segments were increased on account of rapid credit growth in these segments leading to concerns about potential impact of asset price bubbles and impact on credit quality. However, the important difference was that Indian approach entailed sector-specific prescriptions.
In the Indian context it was imperative to ensure that flow of credit to productive sectors was not affected since the rapid credit growth was a matter of concern only in certain sectors. In India, we have identified about a few financial conglomerates perceived as being systemically significant based primarily on size.