PTI mumbai

The Reserve Bank of India (RBI) on Monday directed banks to assign additional 2.5 per cent liquidity buffer rate to internet and mobile banking-enabled retail and small business customer deposits from April 1 next year to stave off any possible risks during times of stress.

In July last year, the RBI had proposed an additional 5 per cent run-off factor, which means the probability of deposits getting withdrawn/transferred, including in stressed situations.

The revised framework, in the works for almost a year, also comes against the backdrop of instances in some foreign jurisdictions where during financial stress, depositors quickly withdrew or transferred funds using digital banking channels. From April 1, 2026, banks will have to assign an additional 2.5 per cent run-off factor for retail deposits which are enabled with internet and mobile banking facilities (IMB), an RBI circular said.

The RBI said the decision follows stakeholders' feedback on draft guidelines on 'Basel-III Framework on Liquidity Standards -- Liquidity Coverage Ratio (LCR) -- Review of Haircuts on High Quality Liquid Assets (HQLA) and Run-off Rates on Certain Categories of Deposits' issued last July.

"A bank shall assign an additional 2.5 per cent run-off factor for retail deposits which are enabled with internet and mobile banking facilities (IMB) i.e., stable retail deposits enabled with IMB shall have 7.5 per cent run-off factor and less stable deposits enabled with IMB shall have 12.5 per cent run-off factor (as against 5 and 10 per cent respectively, prescribed currently)," as per the latest guidelines. The draft had proposed implementation of additional run-off factor from April 1, 2025. In February this year, RBI Governor Sanjay Malhotra had indicated that the liquidity coverage ratio implementation will be deferred by at least a year.