RBI revises liquidity measuring rules for Basel III

Provides exemption to branches of foreign banks from submitting statement with regard to foreign currency

The Reserve Bank has revised certain rules on measuring liquidity for Basel-III norms, providing exemption to branches of foreign banks from submitting statement with regard to foreign currency.

In view of developments since the issue of circulars regarding Liquidity Coverage Ratio (LCR), Liquidity Risk Monitoring Tools and LCR Disclosure Standards, feedback received from the stakeholders and experience gained, it has been decided to amend certain provisions of these guidelines, RBI said in a notification.

The revision also includes asking banks to exclude certain loans backed by deposits from liquidity coverage ratio calculations.

As branches of foreign banks do not hold any foreign currency, they are exempted from submitting this statement with effect from the date of this circular, the revised guidelines said.

All banks in India, including branches of foreign banks are required to report this on a monthly basis, going by the existing norms.

The revised guidelines comes into effect from February 1, 2016.