RBI asks banks to provide info on impact of proposed LCR norms: Report

As per the report, RBI on January 21 asked large commercial banks to provide information on the impact of the LCR under the current framework.

The Reserve Bank of India (RBI) has asked commercial banks to give information on the impact of the proposed liquidity coverage (LCR) norms following a pushback from the lenders against stricter rules, The Economic Times has reported.

The draft norms are to be reviewed by governor Sanjay Malhotra, who succeeded Shaktikanta Das, before being finalised, the report said.

The rules, which will be come into effect from April 1, will require banks covered under LCR to maintain a stock of high quality liquid assets (HQLA) to cover the expected net cash outflows over the next 30 calendar days.

The RBI on January 21 asked large commercial banks to provide information on the impact of the LCR under the current framework, the report said.

“This exercise may be done to assess the impact on system liquidity post implementation of these norms,” the report quoted a banker as saying.

Moneycontrol couldn't independently verify the report.

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The proposed LCR rules issued in July suggest that banks assign an additional five percent run-off factor for retail deposits which are enabled with internet and mobile banking facilities (IMB) i.e., stable retail deposits enabled with IMB shall have 10 percent run-off factor and less stable deposits enabled with IMB shall have 15 percent run-off factor.

Unsecured wholesale funding provided by non-financial small business customers should be treated in accordance with the treatment of retail deposits, the draft circular said.