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RBI issues guidelines on net stable funding ratio

Press Trust of India  |  Mumbai 

The RBI today issued detailed NSFR guidelines to ensure that banks maintain a stable funding profile in relation to the composition of their assets and off-activities.

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

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

"The NSFR would be applicable for Indian banks at the solo as well as consolidated level.

"For foreign banks operating as branches in India, the framework would be applicable on stand-alone basis (for Indian operations only)," the guidelines said.

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

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

The NSFR would be binding on banks with effect from a date which will be communicated in due course, the RBI added.

The RBI had issued draft guidelines on the NSFR for banks in on May 28, 2015.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, May 17 2018. 21:45 IST