RBI has decided to front-load the Facility to Avail Liquidity for Liquidity Coverage Ratio (FALLCR) scheduled to increase by 0.5% each in August and December 2019 and to permit banks to reckon, with immediate effect, the increase in FALLCR of 1.0% of the bank’s Net Demand and Time Liabilities (NDTL). RBI also announced that an Internal Working Group is reviewing the liquidity management framework and the recommendations of the Group are expected toward the middle of July 2019.
FALLCR is scheduled to increase by 0.5% of Net Demand and Time Liabilities (NDTL) on August 01 and December 01, 2019, respectively. It has been decided that, with immediate effect, banks will be permitted to reckon this increase in FALLCR of 1.0% of the bank’s NDTL as Level 1 High Quality Liquid Assets (HQLA) for computing liquidity coverage ratio (LCR), to the extent of incremental outstanding credit to NBFCs and HFCs over and above the amount of credit to NBFCs/HFCs outstanding on their books as on date. The front-loading of FALLCR of 1%, exclusively meant for incremental exposure to NBFCs/HFCs, will form part of general FALLCR as and when the increase in FALLCR takes place as per original schedule on August 01 and December 01, 2019.
Keywords: Asia Pacific, India, Banking, Basel III, LCR, HQLA, FALLCR, NBFC, HFC, Liquidity Risk, RBI
Across 35 years in banking, Blake has gained deep insights into the inner working of this sector. Over the last two decades, Blake has been an Operating Committee member, leading teams and executing strategies in Credit and Enterprise Risk as well as Line of Business. His focus over this time has been primarily Commercial/Corporate with particular emphasis on CRE. Blake has spent most of his career with large and mid-size banks. Blake joined Moody’s Analytics in 2021 after leading the transformation of the credit approval and reporting process at a $25 billion bank.
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