Basel III Framework on Liquidity Standards – LCR, Liquidity Risk Monitoring Tools and LCR Disclosure Standards and Net Stable Funding ratio – Small Business Customers

Last updated: 07 January 2022

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The Reserve Bank of India (RBI) has updated the Basel III framework concerning liquidity standards for banks. Specifically, the threshold limit for deposits and other funds received from non-financial Small Business Customers has been increased from ₹5 crore to ₹7.5 crore. This change applies to the calculation of the Liquidity Coverage Ratio (LCR) and is also relevant for the Net Stable Funding Ratio (NSFR). The revised guidelines are effective immediately and apply to all Commercial Banks, excluding Regional Rural Banks, Local Area Banks, and Payments Banks.

RBI/2021-22/151 DOR.No.PRD.LRG.79/21.04.098/2021-22 January 06, 2022 Dear Sir/Madam, Basel III Framework on Liquidity Standards Liquidity Coverage Ratio (LCR), Liquidity Risk Monitoring Tools and LCR Disclosure Standards and Net Stable Funding ratio Small Business Customers Please refer to the following instructions: Circular DBOD.BP.BC.No.120/21.04.098/2013-14 dated June 09, 2014on Basel III Framework on Liquidity Standards Liquidity Coverage Ratio (LCR), Liquidity Risk

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FAQ :

The threshold limit for deposits and other extensions of funds from non-financial Small Business Customers has been increased from ₹5 crore to ₹7.5 crore for the purpose of maintaining the Liquidity Coverage Ratio (LCR).

Yes, this modification is also applicable to deposits and other extensions of funds received from Small Business Customers for the Net Stable Funding Ratio (NSFR).

For this update, 'Small Business Customers' are non-financial entities whose total aggregated funding (deposits and other extensions of funds) from a bank is up to ₹7.5 crore on a consolidated basis.

This circular is applicable to all Commercial Banks, except for Regional Rural Banks, Local Area Banks, and Payments Banks.

These instructions come into effect from the date of the circular, which is January 06, 2022.

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Notification No : RBI/2021-22/151 DOR.No.PRD.LRG.79/21.04.098/2021-22
Published in Community & General
Source : https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12220&Mode=0

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