This mudra has the general sense of bestowing a blessing, as do most Kuan Yin / Avalokitesvara mudras. Specifically, it is the Mudra of Patience. This is carried over from Indian yoga, and it may have another title in some Buddhist circles. Here, Kuan Yin both embodies and bestows patience. There is also a sense of responsibility implied: ‘to bear and forbear hardship — to maintain your upright conduct’.
The legs of the figure are crossed in a stable, reserved posture that evokes the embodiment of a more balanced and reserved patience, as opposed to the various ‘Royal Ease’ postures we can also often find Kuan Yin adopting. It is as if the Bodhisattva is conveying “this is how you do it, and I am here with you doing it together” more than “here, let me help you”.
Kuan Yin is shown sometimes with the second finger bent and held by the thumb in this mudra, and sometimes with the third finger bent, in the Earth Mudra, also known as the Sun Mudra. (And sometimes with multiple fingers bent.)