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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

Byadmin

Jan 7, 2022 #RBI

January 06, 2022

Dear Sir/Madam,

  1. Please refer to the following instructions:
    1. i. Circular DBOD.BP.BC.No.120/21.04.098/2013-14 dated June 09, 2014 on ‘Basel III Framework on Liquidity Standards – Liquidity Coverage Ratio (LCR), Liquidity Risk Monitoring Tools and LCR Disclosure Standards’;
    2. ii. Circular DBR.BP.BC.No.106/21.04.098/2017-18 dated May 17, 2018 on ‘Standards – Net Stable Funding Ratio (NSFR) – Final Guidelines’;
    3. iii. Circular DBR.No.BP.BC.80/21.06.201/2014-15 dated March 31, 2015 on ‘Prudential Guidelines on Capital Adequacy and Liquidity Standards – Amendments’; and,
    4. iv. Circular DOR.No.BP.BC.23/21.06.201/2020-21 dated October 12, 2020 on ‘Regulatory Retail Portfolio – Revised Limit for Risk Weight’.

2. With the objective to better align our guidelines with the BCBS standard and enable banks to manage liquidity risk more effectively, it has been decided to increase the threshold limit for deposits and other extensions of funds made by non-financial Small Business Customers from ₹ 5 crore to ₹ 7.5 crore for the purpose of maintenance of Liquidity Coverage Ratio (LCR).

3. The above modification is also applicable to deposits and other extensions of funds received from Small Business Customers referred to in the circular DBR.BP.BC.No.106/21.04.098/2017-18 dated May 17, 2018 on ‘Basel III Framework
on Liquidity Standards – Net Stable Funding Ratio (NSFR) – Final Guidelines’.

4. The revised paragraphs after incorporating the above changes in the relevant circulars is given in Annex.

Applicability

5. This circular is applicable to all Commercial Banks other than Regional Rural Banks, Local Area Banks and Payments Banks.

6. These instructions come into effect from the date of the circular.

Yours faithfully


(Usha Janakiraman)
Chief General Manager

To Read More…..
Click the link below…..

https://www.dropbox.com/s/8v50qhrp10640q2/Basel%20III%20Framework%20on%20Liquidity%20Standards.PDF?dl=0

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