RBI's new liquidity coverage norms are big boost to banks

The new LCR guidelines take effect from 1 April 2026, giving banks enough time to transition to the latest standards

- Gopika Gopakumar

In a huge relief to the banking system, the Reserve Bank of India has allowed banks to set aside a lower stock of liquid assets against deposits raised through digital channels, in the event of a potential run on banks.

In the final guidelines on liquidity coverage ratio (LCR) released on Monday, RBI said that banks need to assign a run-off factor of only 7.5% on these retail deposits instead of the 10% proposed in the draft guidelines.