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: 08 January 2022

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The Reserve Bank of India (RBI) has updated its Basel III framework concerning liquidity standards for small business customers. The threshold limit for deposits and other 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). This modification also applies to deposits and funds received from small business customers under the Net Stable Funding Ratio (NSFR) guidelines. These updated instructions 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 under the Net Stable Funding Ratio (NSFR) guidelines.

Aggregated funding means the gross amount of all forms of funding, such as deposits or debt securities, from any single small business customer on a consolidated basis.

These instructions are 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.

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

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