(Bloomberg) -- The Reserve Bank of India has proposed that banks should value their high quality liquid assets, kept in the form of government securities, at no greater than their current market rate.
This value should be adjusted for applicable haircuts in line with the margin requirements under the liquidity adjustment facility and marginal standing facility, RBI said in draft guidelines on Basel-III Framework on Liquidity Standards. The banking regulator plans to implement the new rules from April 1.
Banks can also use portion of the deposits, which have been pledged to get loans by customers, to compute liquidity coverage ratio. The regulator has sought comments from all stakeholders, including banks, by Aug. 31.
“Banking has undergone rapid transformation in recent years,” RBI said in the draft, adding that the LCR framework has been reviewed in light of recent developments to “further enhance the liquidity resilience of banks.”
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