
RBI mandates 2.5% additional run-off factor on digital deposits
'A bank shall assign an additional 2.5 per cent run-off factor for retail deposits which are enabled with internet and mobile banking facilities (IMB),' the RBI said final norms on LCR framework.
The run-off factor refers to the percentage of deposits that could be withdrawn by depositors in a stress scenario. Internet and Mobile Banking facilities (IMB) includes all facilities such as but not limited to internet banking, mobile banking and Unified Payments Interface (UPI) which enables a customer to digitally transfer funds from their accounts.
The lower run-off factor will be a relief for banks as the draft norms had proposed an additional 5 per cent run-off factor for retail deposits which are enabled with (IMB).
The regulator said that the stable retail deposits enabled with IMB will have 7.5 per cent run-off factor and less stable deposits enabled with IMB will have 12.5 per cent run-off factor (as against 5 and 10 per cent respectively, prescribed currently).
RBI said that funding from non-financial entities such as trusts (educational/religious/charitable), Association of Persons (AoPs), partnerships, proprietorships, Limited Liability Partnerships (LLPs) and other incorporated entities will be categorised as funding from non-financial corporates and attract a run-off rate of 40 per cent as against 100 per cent currently.
Unsecured wholesale funding provided by non-financial small business customers (SBCs) will be accorded the same treatment as retail deposits and so will attract an additional 2.5 per cent run-off factor.
The final guidelines said that the level 1 high quality liquidity asset (HQLA) in the form of government securities will be valued at an amount not greater than their current market value, adjusted for applicable haircuts in line with the margin requirements under the Liquidity Adjustment Facility (LAF) and Marginal Standing Facility (MSF).
'These amendments would help improve the liquidity resilience of banks in India and would further align the guidelines with global standards while ensuring that such an enhancement is done in a non-disruptive manner,' the RBI said.
The new norms will come into effect from April 1, 2026, and will be applicable to all commercial banks (excluding payments banks, regional rural banks and local area banks).
According to Anil Gupta, Senior Vice President – Financial Sector Ratings, ICRA, As per RBI's estimate, the reported LCR of the banking system will improve by 6 per cent as of December 31, 2024.
'With an estimated HQLA of almost Rs 45-50 lakh crore for the banking system, this could free up the lendable resources by almost Rs 2.7-3 lakh crore and support the credit growth of the banks,' he said. This headroom can be equivalent to 1.4-1.5 per cent of additional credit growth potential for the banking system.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


The Hindu
22 minutes ago
- The Hindu
Minister Duraimurugan flags off AC buses in Vellore
Minister for Water Resources Duraimurugan on Saturday flagged off seven new AC buses to big cities and towns including Chennai, Bengaluru, Hosur and Tiruchi at a cost of Rs 3.43 crore at a function in new bus terminus here on Saturday. Officials of The Tamil Nadu State Transport Corporation (TNSTC), which will operate the buses on these new routes, said that a total of 105 new buses including 63 mofussil buses and 27 town buses are being operated from Vellore since 2021. Buses are operated in seven new routes and 23 places, where buses were temporarily halted earlier.'Additional AC buses to cities will help engineering and medical students, who study in Chennai and Bengaluru, to travel easily as Mondays always witness huge crowds at the bus terminus in Vellore,' said K. Suganth, a commuter. As per plan, TNSTC officials said that of the total seven buses, two buses will be operated between Vellore and Chennai, four buses between Bengaluru and Vellore and one bus to Tiruchi every day. On the occasion, Collector V. R. Subbulaxmi and A. Ganapathy, general manager, TNSTC (Vellore), were present.


Time of India
37 minutes ago
- Time of India
Gandhi Bazaar's Rs 22-crore parking facility awaits inauguration in Bengaluru
Bengaluru: The long-awaited multi-level car parking facility at Gandhi Bazaar in Chickpet is now complete and ready for public use. Constructed under the Bengaluru Smart City initiative at a cost of Rs 22 crore, the facility includes retail and parking infrastructure to ease congestion in one of the city's busiest commercial areas. BBMP chief commissioner Maheshwar Rao directed officials to expedite the opening of the facility. "We must now finalise a date for the deputy chief minister DK Shivakumar to inaugurate the facility and open it to public at the earliest," said Rao, who was overseeing inspections across the south zone. The four-storey structure includes 50 commercial shops on the basement and ground floor and dedicated parking for 124 vehicles across the upper four levels, with each floor accommodating 31 cars. The facility is equipped with a lift, six toilets, staircases, and a tensile roof canopy on the terrace. You Can Also Check: Bengaluru AQI | Weather in Bengaluru | Bank Holidays in Bengaluru | Public Holidays in Bengaluru As part of his visit, Rao also inspected recent upgrades along Gandhi Bazaar main road, including granite cobblestones at the entrance and circle, bollards on pedestrian paths, and newly white-topped roads. He expressed appreciation for the integrated development of pedestrian and road infrastructure, adding it would complement the new parking facility and improve overall traffic and pedestrian flow in the area. "BBMP plans to ensure that the commercial units within the building are allocated systematically and the parking system is operated in a smart, transparent manner," said a senior BBMP official.


Time of India
37 minutes ago
- Time of India
MPIDC receives proposals for new pvt logistics parks
Indore: Pithampur industrial hub near Indore, is set to significantly boost its logistics infrastructure with the Madhya Pradesh Industrial Development Corporation (MPIDC) receiving proposals for new private logistics parks. This development comes as the region continues to attract major investment in its rapidly expanding industrial and logistics sectors. According to MPIDC executive director Himanshu Prajapati, prominent investors, including Gateway Distriparks and the Dubai-based Sharaf Group, expressed keen interest in developing logistics parks in the area. Both entities specifically requested approximately 40 acres of land each in proximity to the upcoming Indore-Dhar Railway line, signalling a strategic focus on multimodal connectivity. "These are the first private logistic park proposals received by MPIDC that presently are in the initial stage. The lands will be allotted to the private firms on lease while we will, as per the policy, also offer them incentives and other assistance as required," he said. The Executive Director added that these proposed private logistics parks will complement the existing and upcoming logistics infrastructure in Pithampur. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Top 15 Prettiest Icons In The History The Noodle Box Undo Notably, a large-scale Multi-Modal Logistics Park (MMLP) is already under development near Sector 6 of Pithampur. This MMLP is being established with a substantial investment of around Rs 1,110 crore across an area of approximately 250 acres, promising to be a cornerstone of the region's logistics capabilities. "The combined development of these private logistics parks and the state-led MMLP is expected to provide a significant boost to the logistics sector in the wider Indore region, enhancing connectivity, reducing transportation costs, and attracting further industrial growth," he said, adding that the strategic location, coupled with improved rail connectivity from the Indore-Dhar line, positions Pithampur as a crucial logistics gateway for Central India.