Overnight balances held with RBI under SDF shall be eligible as ‘Level 1 High Quality Liquid Assets’ for computation of LCR

 ​    Circular No. RBI/2022-23/141 DOR.LRG.REC.83/03.10.001/2022-23, Dated … Continue reading “Overnight balances held with RBI under SDF shall be eligible as ‘Level 1 High Quality Liquid Assets’ for computation of LCR”
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Circular No. RBI/2022-23/141 DOR.LRG.REC.83/03.10.001/2022-23, Dated 23.11.2022

Earlier RBI issued Circular no. dated June 09, 2014, on ‘Basel III Framework on Liquidity Standards – Liquidity Coverage Ratio (LCR), Liquidity Risk Monitoring Tools and LCR Disclosure Standards’ and Press Release no. dated April 08, 2022, on operationalizing of Standing Deposit Facility (SDF).

Various queries were received from the banks about the treatment of SDF. Accordingly, the RBI has advised that overnight balances held by the banks with RBI under SDF shall be eligible as ‘Level 1 High Quality Liquid Assets (HQLA)’ for computation of LCR.

This circular applies to all Commercial Banks (excluding Local Area Banks, Regional Rural Banks and Payments Banks). Further, the circular shall come into force with an immediate effect.

Click Here To Read The Full Circular

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