RBI makes liquidity monitoring rules easier for banks

Reserve Bank of India softened the rules for Liquidity Measurement and Risk Management making the Banks feel comfortable on Liquidity Measurement aspect.
It said that banks do not need to consider retail deposits with maturity beyond a month for liquidity coverage ratio (LCR) calculation, giving more flexibility in their daily operations.
The banking regulator has also excluded pledged deposits with over 30 days residual maturity from the calculation.
RBI said cash outflows related to retail term deposits with a residual maturity or withdrawal notice period of greater than 30 days can be excluded from total expected cash outflows if the depositor has no legal right to withdraw deposits within the 30-day horizon of the LCR.
The banks which are under acute stress in terms of sticky assets will now have it a bit easy on managing LCR rules.

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