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As stated in the Press Release, The Reserve Bank of India (RBI) has recently auctioned the updates to the Liquidity Coverage Ratio (LCR) rules drafted on July 25, 2024. Further consideration was made in these updates to inputs from banks and other stakeholders.
Important Facilitation Changes with the New Guidelines on LCR Issued by RBI
Increase In Off Run Rat for SMEs and Retail Accounts:
LCR now will also allow additional 2.5% off run rate on retail & SME business internet and phone banking integrated accounts.
Did Not Also Validate Redetermination of Government Securities:
The marking of valuation on government securities will now be done with applying haircut under margin as outlined in LAF/MSF/KM.
Redefining Run Off Rat for Specified Bodies:
It is notable that the run criteria defining receiving non financial bodies and education entities like church and sole proprietorships firms also Limited Liability Partnerships has degressed from one hundred to forty percent.
Consequences and Carrying Out
According to previos rubrics valeed changes frameworksaming mid mark that identifies linking controls not for school children Kereditis of midds are changes not applied. Considering the analyzes on bank's data available by the 31st of December, 2024, RBI indicates that these legislative amends will improve the LCR across banks by around six percent. Post changes all the banks are now expected to seamlessly achieve the mandatory LCR benchmarks placed on them for these alterations which strengthen liquidity are positioned on them in alignment with international Liquidity Coverage Ratio Standards.To create a seamless transition for adoption, banks were provided with sufficient time to calibrate their systems. These new policies will formally take effect starting on April 1, 2026.
