In addition there is a requirement of countercyclical capital buffers which will be required to be built up under certain conditions as also of additional capital requirement for Global Systemically Important Financial Institutions (GSIFIs). Higher equity capital is envisaged to contain risks in the financial system and make it more resilient.
Along with the higher capital requirements, the new regulatory framework also widened the risk coverage especially those related to capital market activities; trading book, securitisation products, counterparty credit risk on OTC derivatives and repos. All these would result in a substantially larger capital requirement for the banking sector.