The central bank says some of the guidelines, related to Liquidity Coverage Ratio and Net Stable Funding Ratio for funding liquidity will become binding for banks from 1 January 2015 and 1 January 2018, respectively.
Mumbai: The Reserve Bank of India (RBI) on Tuesday released draft guidelines related to the Basel III norms, an international accounting standard for banks. While the guidelines are essentially compilation of different guidelines on the standard that RBI put out time to time, the central bank said some of the guidelines, related to Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) for funding liquidity will become binding for banks from 1 January 2015 and 1 January 2018, respectively. The LCR is related to the “short-term resilience of banks to potential liquidity disruptions by ensuring that they have sufficient high quality liquid assets to survive an acute stress scenario lasting for 30 days,” and the “NSFR promotes resilience over longer-term time horizons by creating additional incentives for banks to fund their activities with more stable sources of funding on an ongoing structural basis,” the draft guidelines put on the website said. Banks are to give their feedback on the draft by 21, March.
Mint
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