Updated By: LatestGKGS Desk
RBI eased cash reserve rules to ease liquidity condition of banks
RBI eased cash reserve rules to ease liquidity condition of banks: Details, Objective, Highlights
The Reserve Bank of India enhanced the “Facility to Avail Liquidity for Liquidity Coverage Ratio (FALLCR)” from the existing 11 percent to 13 percent of their deposits.
The main objective behind is to overcome any possible liquidity constraints by the banks.
Banks could 'carve out' up to 15 percent of holdings under the statutory liquidity reserves to meet their liquidity coverage ratio (LCR) requirements as compared to 13 percent now.
The relaxation in statutory liquidity ratio (SLR) requirement is with effect from 1st October 2018.
This will supplement the ability of individual banks to avail of liquidity, from the repo markets.
RBI said that it stands ready to meet the durable liquidity requirements of the system through various available instruments.
Availing of liquidity against the securities under FALLCR is usually permitted to banks only under the conditions of stress.
Current SLR: 19.5%.
