Sunday, July 24, 2016

Basel III Framework on Liquidity Standards

Assets allowed as the Level 1 High Quality Liquid Assets (HQLAs) for computing the LCR include Government securities in excess of the minimum SLR requirement and, within the mandatory SLR requirement, Government securities to the extent allowed by RBI under MSF [2 per cent of the bank’s NDTL] and under Facility to Avail Liquidity for Liquidity Coverage Ratio (FALLCR) [9 per cent of the bank’s NDTL].

Hence, the total carve-out from SLR available to banks would be 11 per cent of their NDTL. For this purpose, banks should continue to value such reckoned government securities within the mandatory SLR requirement at an amount no greater than their current market value.
Based on RBI notification dated 21/07/2016. For any further clarification, please refer --------------Poppy