**Summary:**
This circular, DOR.LRG.REC.8303.10.001/2022-23, issued by the Reserve Bank of India (RBI) on November 23, 2022, clarifies the treatment of the Standing Deposit Facility (SDF) within the Basel III Framework on Liquidity Standards. Specifically, it addresses queries received from banks regarding the Liquidity Risk Management Framework.
The circular advises that overnight balances held by banks with the RBI under the SDF are eligible to be classified as Level 1 High Quality Liquid Assets (HQLA) for the purpose of computing the Liquidity Coverage Ratio (LCR).
This directive is applicable to all Commercial Banks, excluding Local Area Banks, Regional Rural Banks, and Payments Banks, and is effective immediately.
The circular refers back to circular DBOD.BP.BC.No.12021.04.098/2013-14 dated June 09, 2014, concerning the Basel III Framework on Liquidity Standards, and Press Release 2022-2023/41 dated April 08, 2022, regarding the operationalization of the SDF.
For further information, contact Usha Janakiraman, Chief General Manager, Department of Regulation, Central Office, RBI at:
* Address: 12th and 13th Floor, Central Office Building, Shahid Bhagat Singh Marg, Fort, Mumbai - 400 001
* Tel: 022-22601000, 022-22705691
* Email: cgmicdor@rbi.org.in
* Website: www.rbi.org.in
Key Entities Referenced
Reserve Bank of India: The central bank of India and the publisher of this policy document.
Basel III Framework on Liquidity Standards: An international regulatory framework for banks, addressing liquidity risk.
Standing Deposit Facility (SDF): A monetary policy instrument used by the Reserve Bank of India.
Liquidity Coverage Ratio (LCR): A key component of the Basel III framework, requiring banks to hold sufficient high-quality liquid assets to cover short-term outflows.
High Quality Liquid Assets (HQLA): Assets that can be easily and immediately converted into cash at little or no loss of value.
Commercial Banks: Banks to which this circular is applicable, excluding Local Area Banks, Regional Rural Banks and Payments Banks.
Usha Janakiraman: Chief General Manager at the Reserve Bank of India, signatory of the circular.
Mumbai, Maharashtra: Location of the Central Office of the Department of Regulation, Reserve Bank of India.
भारतीय �रजव र् बक�
RESERVE BANK OF INDIA
www.rbi.org.in
RBI/2022-23/141
DOR.LRG.REC.83/03.10.001/2022-23 November 23, 2022
Madam/Dear Sir,
Basel III Framework on Liquidity Standards – Standing Deposit Facility
Please refer to circular DBOD.BP.BC.No.120/21.04.098/2013-14 dated June 09, 2014 on
‘Basel III Framework on Liquidity Standards – Liquidity Coverage Ratio (LCR), Liquidity Risk
Monitoring Tools and LCR Disclosure Standards’ and the Press Release 2022-2023/41 dated
April 08, 2022 on operationalising of Standing Deposit Facility (SDF).
2. We have received queries from banks seeking clarification on the treatment of SDF under
Liquidity Risk Management Framework.
3. Accordingly, it is advised that the overnight balances held by banks with RBI under SDF
shall be eligible as ‘Level 1 High Quality Liquid Assets (HQLA)’ for computation of LCR.
Applicability
4. This circular is applicable to all Commercial Banks (excluding Local Area Banks, Regional
Rural Banks and Payments Banks).
5. These instructions shall come into force with immediate effect.
Yours faithfully
(Usha Janakiraman)
Chief General Manager
_____________________________________________________________________________________________________________________________
�व�नमयन �वभाग,केन्द्र�य कायार्लय, 12 वी और 13वी मंिज़ल, केन्द्र�य कायार्लय भवन, शह�द भगत �सहं माग,र् फोटर्, मुंबई 400001
दरूभाष: 022-22601000, फ़ैक्स 022-22705691 ई-मेल: cgmicdor@rbi.org.in
Department of Regulation, Central Office, 12th and 13th Floor, Central Office Building, Shahid Bhagat Singh Marg, Fort, Mumbai- 400 001
Tel: 022- 2260 10000 Fax: 022-2270 5691 email: cgmicdor@rbi.org.in
�हन्द� आसान ह� । इसका प्रयोग बढ़ाइए।
चते ावनी: भारतीय �रज़व र्बक� द्वारा ई-मेल, डाक, एसएमएस या फोन कॉल के ज�रए �कसी भी व्यिक्त क� जानकार� जैस ेबक� के खात ेका ब्यौरा, पासवड र्आ�द नह� ं
मांगी जाती है। यह धन रखन ेया देन ेका प्रस्ताव भी नह� ंकरता है। ऐस ेप्रस्ताव� का �कसी भी तर�के से जवाब मत द�िजए।