RBI Announces Amendments To Liquidity Coverage Ratio Framework; Revised Rules Effective From 1 April 2026

New Delhi: The Reserve Bank Of India (RBI) has introduced Amendments to Liquidity Coverage Ratio (LCR) Framework, mentioning financial institution shall: assign further run-off charges of 2.5 in keeping with cent to web and cellular banking enabled retail and small trade buyer deposits.

To give the banks ok time to transition their programs to the brand new requirements for LCR computation, the revised directions shall change into acceptable w.e.f. April 01, 2026.

The Reserve Bank issued a draft round on July 25, 2024 on ‘Basel III Framework on Liquidity Standards – Liquidity Coverage Ratio (LCR) – Review of Haircuts on High Quality Liquid Assets (HQLA) and Run-off Rates on Certain Categories of Deposits’. The draft round proposed sure amendments to the LCR framework and invited feedback from banks and stakeholders.

RBI stated that the comments won has been sparsely tested and the overall tips had been issued by means of the Reserve Bank as of late. 

With the issuance of those tips, a financial institution shall: assign further run-off charges of 2.5 in keeping with cent to web and cellular banking enabled retail and small trade buyer deposits, stated RBI.

IT additionally added that banks shall modify the marketplace price of Government Securities (Level 1 HQLA) with haircuts in step with margin necessities underneath the Liquidity Adjustment Facility (LAF) and Marginal Standing Facility (MSF).

In addition, the overall tips additionally rationalise the composition of wholesale investment from ‘other legal entities’. Consequently, investment from non-financial entities like trusts (instructional, charitable and spiritual), partnerships, LLPs, and many others. shall draw in a decrease run-off charge of 40 in keeping with cent as towards 100 in keeping with cent lately.

“The Reserve Bank has undertaken an impact analysis of the above measures based on data submitted by banks, as on December 31, 2024. It is estimated that the net impact of these measures will improve the LCR of banks, at the aggregate level, by around 6 percentage points as on that date. Further, all the banks would continue to meet the minimum regulatory LCR requirements comfortably,” RBI stated

The central financial institution added, “Reserve Bank is sanguine that these measures will enhance the liquidity resilience of banks in India, and further align the guidelines with the global standards in a non-disruptive manner”.