Bankers, check! RBI seeks information on impact of new LCR rules
Reserve Bank of India (RBI) has asked commercial banks to provide information on the impact of the proposed liquidity coverage (LCR) norms following pushback from banks over the move to make the norms more stringent, said people with knowledge of the matter.
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The draft norms are to be reviewed by governor Sanjay Malhotra, who succeeded Shaktikanta Das on December 9, before being finalised, they said. The rules, which are to take effect on April 1, will require lenders to set aside more money in high quality liquid assets (HQLAs), squeezing their lending capacity. Such assets are used to meet unexpected demands for liquidity in the event of a disruption. The LCR norms are aimed at mitigating risk arising from a likelihood of substantial online withdrawals. Banks had given feedback to the finance ministry that the revised norms could impact their ability to lend, as reported by ET on September 19 last year.
The banking regulator on Tuesday asked large commercial banks to provide information on the impact of the LCR under the current framework and under the draft norms, said the people cited above.
«This exercise may be done to assess the impact on system liquidity post implementation of these norms,» said a banker aware of the matter.
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