Jefferies has assessed the Reserve Bank of India’s final Liquidity Coverage Ratio (LCR) guidelines as being considerably more favourable than the original and draft proposals. The central bank has eased liquidity rules, notably:
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The run-off rate on deposits from trusts, partnerships, and proprietary firms has been slashed from 100% to 40%.
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The run-off rate on digital deposits has been reduced to zero, as opposed to higher expectations in the earlier draft.
The RBI also specified tighter valuation rules for government securities (G-Secs), adjusting their worth to market values with applicable haircuts.
Jefferies estimates that these revised norms will release nearly ₹3–3.5 trillion in liquidity effective April 1, 2026, as opposed to a ₹6–7 trillion outflow expected under the earlier draft – a ₹10 trillion swing in liquidity impact.
The brokerage believes that PSU banks, older private sector banks, and large private banks are likely to benefit the most from the relaxed norms.
Disclaimer: The above views are of the broker’s and not the author or the publication’s. Please make any and every investment decision after consulting your financial advisor.
