RBI Final LCR Norms for Internet and Mobile Banking Deposits
Why in the news
The RBI issued its final Liquidity Coverage Ratio (LCR) rules, softer than the draft, to strengthen bank liquidity without disruption and match global standards.
Key facts
- Applicable from April 1, 2026.
- Run-off factors decide how much liquidity a bank must hold against deposits.
- Extra run-off for retail and small business deposits reachable via internet and mobile banking (IMB): 2.5%, lower than the 5% proposed.
- Stable IMB-linked retail deposits carry 7.5% and less stable ones 12.5%.
| Category | Draft | Final |
|---|---|---|
| Extra run-off, IMB-linked retail deposits | 5% | 2.5% |
| Funds from non-financial entities (trusts, partnerships, LLPs) | 100% | 40% |
Significance
- Banks must park less liquidity than the draft needed, freeing lending resources and supporting credit growth.
- Banks had objected to higher run-off factors; final norms offer relief.
- System LCR up about 6% (as of December 31, 2024); about ₹3 trillion of lendable resources released through better HQLA management.
- Could support an extra 1.4-1.5% credit growth.
HQLA valuation
- Level 1 HQLA (mostly government securities) is valued at market price.
- Haircuts apply as per LAF and MSF guidelines.
Exam angle
- LCR = Liquidity Coverage Ratio; HQLA = High-Quality Liquid Assets.
- Effective date: April 1, 2026.
- Regulator: RBI.