RBI Circular on FALLCR Against Credit Disbursed to HFCs and NBFCs
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
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Dr. Samuel W. Malone
Sam leads the quantitative research team within the CreditEdge™ research group. In this role, he develops novel risk and forecasting solutions for financial institutions while providing thought leadership on related trends in global financial markets.
Dieter Van der Stock
IFRS subject matter expert; accounting authority; risk management specialist
Previous Article
IA Publishes Guideline on Enterprise Risk Management for InsurersRelated Articles
|
News
APRA to Transition to Annual Stress Testing of Large Banks in 2020APRA published key findings of the stress testing assessment conducted on authorized deposit-taking institutions.
February 21, 2020
WebPage
Regulatory News
|
|
News
EC Consults on Review of Non-Financial Reporting DirectiveEC is launched a consultation on the review of the Non-Financial Reporting Directive or NFRD (Directive 2014/95/EU, as part of its strategy to strengthen sustainable investment in Europe.
February 20, 2020
WebPage
Regulatory News
|
|
News
EIOPA Consults on Standards for Supervisory Reporting Under PEPP RuleEIOPA is consulting on the implementing technical standards for supervisory reporting and cooperation, as mandated by the Pan-European Personal Pension Product (PEPP) Regulation (Regulation 2019/1238).
February 20, 2020
WebPage
Regulatory News
|
|
News
ECB Report on Transfer of Liquidity from EONIA Products to €STRECB published a report on the transfer of liquidity from the cash and derivatives products of the Euro Overnight Index Average (EONIA) to the Euro Short-Term Rate (€STR).
February 19, 2020
WebPage
Regulatory News
|
|
News
ESRB Publishes Report on Systemic CyberattacksESRB published a report that explores systemic implications of cyber incidents, such as cyberattacks.
February 19, 2020
WebPage
Regulatory News
|
|
News
FSB Chair Sets Out Key Deliverables for G20 Presidency of Saudi ArabiaFSB published a letter from the Chair Randal K. Quarles to the G20 finance ministers and Central Bank governors ahead of the meetings in Riyadh on February 22-23.
February 19, 2020
WebPage
Regulatory News
|
|
News
CFTC Proposes Rules on Derivative Position Limits and Swap ExecutionCFTC approved a proposed rule on position limits for derivatives and a proposed rule amending requirements for certain Swap Execution Facilities and real-time reporting.
February 19, 2020
WebPage
Regulatory News
|
|
News
BOJ Deputy Governor Speaks on Interest Rate Benchmark Reform in JapanThe Deputy Governor of BOJ Masayoshi Amamiya spoke in Tokyo about how Japan should proceed with interest rate benchmark reform over the next two years until the end of 2021, when the discontinuation of LIBOR is expected.
February 19, 2020
WebPage
Regulatory News
|
|
News
BIS Appoints Heads of Innovation Hubs in Singapore and SwitzerlandBIS announced key personnel appointments to the Innovation Hubs in Singapore and Switzerland.
February 19, 2020
WebPage
Regulatory News
|
|
News
OSFI Proposes New Benchmark Rate for Qualifying Uninsured MortgagesOSFI announced that it is considering a new benchmark rate for determining the minimum qualifying rate for uninsured mortgages.
February 18, 2020
WebPage
Regulatory News
|
