Banks planning to ask RBI to delay April liquidity rule
Budget with ET
Sitharaman has one job to do and it’s the most crucial one yet
Will Modi govt have something special for Nitish Kumar’s Bihar?
Budget should help in safeguarding India’s trade interests as Trump returns
Banks plan to urge the Reserve Bank of India to delay the implementation of the new liquidity coverage ratio norms, currently due to take effect on April 1, according to the people, who declined to be identified discussing private matters. The request will be made through the Confederation of Indian Industry, which will meet recently-appointed RBI Governor Sanjay Malhotra in the coming days, the people said.
The tighter norms, announced in July by Malhotra’s predecessor, mandate banks to park a larger portion of their deposits in sovereign bonds as a buffer against sudden withdrawals in the age of digital banking. However, implementing them would add to the challenges faced by lenders already grappling with a cash squeeze in the banking system.
To be sure, the RBI did cut the cash reserve ratio — the proportion of deposits that banks must set aside with the central bank — in its December meeting, and this month stepped up cash injections via repo operations. Still, bankers are calling for more measures as deposit growth slows and economic growth falters.
Deposit expansion in the banking system was at 10.2% on-year as of Dec. 27, trailing the credit growth of 12.4%, according to the latest central bank data.
Artificial Intelligence(AI)
Java Programming with ChatGPT: Learn using Generative AI
By —
