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Net stable funding ratio norms for banks to be operational from April: RBI

As per the guidelines, the RBI may require an individual bank to adopt more stringent standards to reflect its funding risk profile and its compliance with the 'sound principles'

Press Trust of India  |  Mumbai 

Reserve Bank of India | File Photo

The on Thursday said norms that mandate to maintain a stable funding profile in relation to the composition of their assets and off-balance sheet activities will be operational from April 2020. 

The is defined as the amount of available stable funding relative to the amount of required stable funding. 

Against the backdrop of the global financial crisis that started in 2007, the Basel Committee on Banking Supervision (BCBS) proposed certain reforms to strengthen global capital and liquidity regulations with the objective of promoting a more resilient banking sector.

The guidelines on (NSFR) are in line with global norms prescribed by the Basel Committee. 

While issuing the guidelines in May this year, the had said the date of its implementation would be notified in a due course.

"It has now been decided that the guidelines will come into effect from April 1, 2020," the central bank said in a notification.

The NSFR would be applicable for at the solo as well as consolidated level. For foreign operating as branches in India, the framework would be applicable on stand-alone basis (for Indian operations only), said the guidelines.

As per the guidelines, the Reserve Bank may require an individual bank to adopt more stringent standards to reflect its funding risk profile and its compliance with the 'sound principles'.   

First Published: Thu, November 29 2018. 20:35 IST
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