INSUBCONTINENT EXCLUSIVE:
MUMBAI:The Reserve Bank of India has allowed banks to consider a further 2 per cent of their government securities investments as high
quality liquid assets (HQLAs) under the Basel-III calculations, reducing the pressure on them to raise short-term funds for these compulsory
will be permitted to reckon as Level 1 HQLAs government securities held by them up to another 2 per cent of their net demand and time
liabilities (NDTL) within the mandatory SLR requirement
19.5 per cent of their total deposits in government securities, known as statutory liquidity ratio (SLR)
So far 11 per cent of these investments was considered HQLAs and it will now increase to 13 per cent.
Under the Basel-III rules, banks have
to invest a part of their funds into liquid securities which make up a liquidity coverage ratio (LCR)
Under LCR, banks have to invest a part of their deposits and loan outflows within a 30-day period into the so-called HQLA which could be
government securities or treasury bills.
Banks, especially private sector ones, had to borrow short-term funds to make the LCR
Bank.
Bank CD rates for less than one year have shot up to 8.20 per cent from around 6.90 per cent in November
These rates are now expected to ease.
