The Reserve Bank of India has announced revised liquidity coverage ratio guidelines, lowering the additional run-off factor to 2.5% for retail deposits that are enabled with both internet and mobile banking facilities. The new norms will take effect from April 1, 2026.

This change replaces the earlier draft proposal, which had suggested a 5% run-off factor and had sought to differentiate between stable and less-stable retail deposits. The final guidelines opt for a simplified structure, applying the reduced run-off uniformly to digital-access retail accounts.

The LCR framework, introduced post-2008, ensures that banks hold adequate liquid assets to withstand a 30-day stress scenario. 
The RBI has also revised the treatment of wholesale funding from certain non-financial entities, including educational, charitable and religious trusts, as well as partnerships and LLPs. The applicable run-off rate for such funding has been reduced to 40% from the previous 100%.

Further, the valuation of Level 1 high-quality liquid assets including government securities, must now incorporate haircuts consistent with margin requirements under the Liquidity Adjustment Facility and Marginal Standing Facility. This adjustment aligns asset valuation methodologies across liquidity management frameworks.

Based on data reported by banks as of December 31, 2024, the RBI estimates that the revised framework will improve the aggregate LCR by approximately six percentage points. 

The RBI stated that these measures are aimed at enhancing liquidity resilience while maintaining consistency with international standards