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RBI mandates 2.5% extra run-off factor
Business Standard
|April 22, 2025
In a relief to banks, the Reserve Bank of India (RBI) has mandated a 2.5 percent additional run-off factor for retail deposits linked to internet and mobile banking (IMB) facilities for commercial banks.
This was stated in its final guidelines for computation of liquidity coverage ratio (LCR) compared to 5 percent proposed in the draft norms issued in July 2024.
In addition, funding from non-financial entities like trusts (educational, charitable and religious), partnerships and LLPs, among others, will attract a lower run-off rate of 40 percent against 100 percent currently.
The impact of banks' LCR — which they need to maintain at 100 percent — will be much lower compared to what the draft norms proposed.
These final norms, applicable to all commercial banks — excluding payments banks, regional rural banks and local area banks — will come into effect from April 1, 2026.
This story is from the April 22, 2025 edition of Business Standard.
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