{"id":432,"date":"2016-02-11T19:16:24","date_gmt":"2016-02-11T13:46:24","guid":{"rendered":"http:\/\/yourcareerheights.com\/?p=432"},"modified":"2016-02-11T20:53:24","modified_gmt":"2016-02-11T15:23:24","slug":"basel-iii-framework-on-liquidity-standards-liquidity-coverage-ratio-lcr-liquidity-risk-monitoring-tools-and-lcr-disclosure-standards","status":"publish","type":"post","link":"https:\/\/yourcareerheights.com\/?p=432","title":{"rendered":"Basel III Framework on Liquidity Standards \u2013 Liquidity Coverage Ratio (LCR), Liquidity Risk Monitoring Tools and LCR Disclosure Standards"},"content":{"rendered":"

The Reserve Bank of India has addressed the liquidity issues of commercial banks by easing the regulations on the liquidity coverage ratio. On 11th Feb 2016\u00a0it allowed banks to qualify 10% of SLR bonds as Liquidity Coverage Ratio (LCR) from 7% earlier, a requirement mandated under the Basel-III accounting norms from their Statutory Liquidity Ratio (SLR) requirements. The move will help banks to use an additional Rs 2.8 lakh crore of their resources for lending.\u00a0<\/span><\/p>\n

Banks have been facing tight market liquidity forcing them to borrow from the Reserve Bank their daily liquidity requirements and have been saying that because of tight liquidity they have not been able to pass on the benefit of interest rate cuts to the borrowers. They have borrowed an average of Rs 1.3 lakh crore from the RBI in January. The additional resources released will come in handy in the fourth quarter when conventionally credit demand is high.\u00a0<\/span><\/p>\n

RBI vide circular no.RBI\/2015-16\/320\/DBR. BP. BC. No. 77\/21.04.098\/2015-16 dated February 11, 2016 that henceforth banks will be permitted to reckon government securities held by them up to another 3% of their NDTL under FALLCR within the mandatory SLR requirement as level 1 HQLA for the purpose of computing their LCR. Hence the total carve-out from SLR available to banks would be 10 per cent of their NDTL.<\/p>\n

Presently, the assets allowed as the Level 1 High Quality Liquid Assets (HQLAs) for the purpose of computing the LCR of banks, inter alia, include Government securities in excess of the minimum SLR requirement, and within the mandatory SLR requirement, Government securities to the extent allowed by RBI, under Marginal Standing Facility (MSF) [presently 2 per cent of the bank\u2019s NDTL] and under Facility to Avail Liquidity for Liquidity Coverage Ratio (FALLCR) [presently 5 per cent of the bank\u2019s NDTL].<\/p>\n

It has been decided that henceforth, in addition to the above-mentioned assets, banks will be permitted to reckon government securities held by them up to another 3per cent of their NDTL under FALLCR within the mandatory SLR requirement as level 1 HQLA for the purpose of computing their LCR. Hence the total carve-out from SLR available to banks would be 10 per cent of their NDTL. For this purpose, banks should continue to value such reckoned government securities within the mandatory SLR requirement at an amount no greater than their current market value (irrespective of the category of holding the security, i.e., HTM, AFS or HFT).<\/p>\n

Source: rbi.org. ; ET<\/p>\n

For Further Reading : Refer RBI circulars DBOD.BP.BC.No.120\/21.04.098\/2013-14 dated June 9, 2014 and DBR.BP.BC.No.52\/21.04.098\/2014-15 dated November 28, 2014 on \u2018Basel III Framework on Liquidity Standards \u2013 Liquidity Coverage Ratio (LCR), Liquidity Risk Monitoring Tools and LCR Disclosure Standards\u2019.<\/p>\n \n","protected":false},"excerpt":{"rendered":"

The Reserve Bank of India has addressed the liquidity issues of commercial banks by easing the regulations on the liquidity coverage ratio. On 11th Feb 2016\u00a0it allowed banks to qualify 10% of SLR bonds as Liquidity Coverage Ratio (LCR) from 7% earlier, a requirement mandated under the Basel-III accounting norms from their Statutory Liquidity Ratio…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"aside","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[5,10,2,13],"tags":[3,11,12],"class_list":["post-432","post","type-post","status-publish","format-aside","hentry","category-banking-jobs","category-economy","category-interview","category-jaiibcaiib","tag-banking","tag-finance","tag-jaiibcaiib","post_format-post-format-aside"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[],"jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/posts\/432","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=432"}],"version-history":[{"count":5,"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/posts\/432\/revisions"}],"predecessor-version":[{"id":439,"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=\/wp\/v2\/posts\/432\/revisions\/439"}],"wp:attachment":[{"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=432"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=432"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/yourcareerheights.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=432"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}