The rating firm expects the relaxation in LCR guidelines to add some capacity, potentially boosting loan growth by 100 to 150 basis points.
Malhotra’s RBI is betting that a year-long transition and a 6% LCR boost will smooth the path. Whether banks—and the economy—can walk this tightrope without stumbling remains to be seen
Addressing concerns over the potential effects of the new draft guidelines, PNB CEO said there will be no major impact on the bank's operations.
The rules, which will kick in from April 1, require banks covered under LCR to maintain a stock of high quality liquid assets to cover the expected net cash outflows over the next 30 calendar days
Currently, Bank of Baroda’s LCR stood at 138 percent as on June 30, as per press release.
The new RBI draft rules require banks to assign an extra 5 percent runoff rate to deposits made via internet and mobile banking.
The RBI seems to be a bit worried that in the new era of fast-paced technology (mobile, internet banking), customers can withdraw massive amount of deposits at a click
Market participants said they will wait for the Liquidity Coverage Ratio (LCR) review draft, which they said could have an impact on bank's liquidity.
Until the announcement, only 7 percent of the SLR bonds could be counted under LCR bonds.
The standards adopted by the Reserve Bank with regard to risk-based capital requirements are 'compliant' with minimum Basel capital standards, the central bank said on Wednesday.
The Reserve Bank of India has introduced liquidity coverage ratio (LCR) which requires banks to hold significantly higher levels of liquidity compared to earlier times.
The liquidity coverage ratio (LCR) will be introduced in January 2015. As per the new rules, banks will need to maintain highquality liquid assets equal to one month of net cash outflows in stressed conditions.
The Finance Ministry has requested the Reserve Bank to relax capital adequacy norms for banks in line with the recommendations made earlier this month by the Basel Committee on Banking Supervision.
To help banks tide over liquidity shocks, the RBI today came out with draft Basel III guidelines under which lenders will have to maintain a minimum amount of assets that can be encashed fast, and set up mechanisms to monitor risks.