RBI New Rules: RBI made new rules regarding LCR, will be implemented from April 1, 2026

RBI had issued a draft of changes in the rules related to LCR on 25 July 2024. The central bank had sought suggestions from banks and other stakeholders regarding it.

RBI New Rules: RBI had issued a draft of changes in the rules related to LCR on 25 July 2024. The central bank had sought suggestions from banks and other stakeholders regarding it. According to the new rules, now banks will have to apply an additional 2.5% run-off rate on retail and small business accounts linked to internet and mobile banking.

The valuation of Government Securities will now require a haircut as per the margin requirements prescribed under LAF (Liquidity Adjustment Facility) and MSF (Marginal Standing Facility). The run-off rate on funding received from non-financial entities such as educational, religious and charitable trusts, partnership firms and LLPs has now been reduced from 100% to 40%.

RBI has analysed the impact of these changes based on bank data till December 31, 2024, which estimates that these measures will improve the overall LCR level of banks by about 6 per cent.

All banks will continue to meet their required LCR norms with ease and these changes will strengthen the liquidity position of banks and align with international standards. Banks have been given sufficient time to adapt their systems to these new rules, and these new instructions will come into effect from April 1, 2026.

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