In continuation of the guidelines issued under the Basel III Framework on Liquidity Standards – Liquidity Coverage Ratio (LCR), Liquidity Risk Monitoring Tools, and LCR Disclosure Standards, and pursuant to the draft circular dated July 25, 2024, feedback from stakeholders has been duly examined. Based on the review and analysis, the following final guidelines are issued:
1. Run-Off Factors for Retail Deposits with Internet and Mobile Banking (IMB) Facilities
Retail deposits enabled with internet and mobile banking (IMB) facilities shall attract an additional run-off factor of 2.5 per cent:
Stable deposits with IMB: 7.5% run-off (previously 5%)
Less stable deposits with IMB: 12.5% run-off (previously 10%)
2. Unsecured Wholesale Funding from Non-Financial Small Business Customers (SBCs)
Unsecured wholesale funding provided by non-financial SBCs shall be treated in line with the treatment of retail deposits specified in paragraph 1 above.
3. Valuation of Level 1 High Quality Liquid Assets (HQLA)
Level 1 HQLA in the form of Government securities shall be valued at no more than their current market value, after applying applicable haircuts in accordance with margin requirements prescribed under the Liquidity Adjustment Facility (LAF) and Marginal Standing Facility (MSF), as outlined in RBI circular FMOD.MAOG No.125/01.01.001/2017-18 dated June 06, 2018, and subsequent amendments.
4. Treatment of Pledged Deposits
Where a deposit—previously excluded from LCR computation (e.g., non-callable fixed deposit)—is contractually pledged as collateral for a credit facility or loan, it shall be treated as callable for LCR purposes. In such cases, the provisions under Sl. No. 9 of the annexure to circular dated March 23, 2016, shall apply.
5. Reclassification of Funding from Certain Entities
In modification of Sl. No. 10 of the annexure to the circular dated March 23, 2016, the following revised classification shall apply:
The ‘Other Legal Entities’ (OLE) category shall include all deposits and other funding from:
Banks
Insurance companies
Financial institutions
Entities engaged in the business of financial services
Funding from non-financial entities—including trusts (educational/religious/charitable), Associations of Persons (AoPs), partnerships, proprietorships, Limited Liability Partnerships (LLPs), and other incorporated entities—shall be classified as funding from non-financial corporates and attract a run-off rate of 40% (as against the current 100%), unless such entities are classified as SBCs under the LCR framework.
6. Rationale and Objective
These amendments are aimed at strengthening the liquidity resilience of banks in India while aligning domestic standards with global best practices. The transition is structured to ensure minimal disruption to existing systems and operations.
7. Applicability
These revised guidelines shall apply to all Commercial Banks, excluding:
Payments Banks
Regional Rural Banks (RRBs)
Local Area Banks
8. Effective Date
The provisions of this circular shall come into effect from April 01, 2026.
Link – https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12836&Mode=0
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