What changed
The threshold for classifying deposits from non-financial small business customers as retail-like for LCR purposes has been raised from ₹5 crore to ₹7.5 crore. This change also applies to the NSFR framework under the 2018 guidelines. The revised text is provided in an annex to the circular.
What it means for you
Banks can now treat larger deposits from small business customers (up to ₹7.5 crore) as stable retail deposits for liquidity calculations, which may reduce the required high-quality liquid assets (HQLA) for these funds. This aligns Indian norms with Basel standards and gives banks more flexibility in managing liquidity risk, especially for small business relationships.
What you must do
- Update internal LCR and NSFR calculation systems to reflect the new ₹7.5 crore threshold for small business customer deposits.
- Review and reclassify existing small business customer deposits between ₹5 crore and ₹7.5 crore as retail-like for liquidity reporting.
- Ensure consistent treatment of these deposits in risk management systems as per RBI's retail deposit criteria.
- Communicate the change to relevant treasury and risk management teams for compliance from the circular date.
Who it affects
All commercial banks (excluding RRBs, LABs, and Payments Banks), Treasury and risk management departments, Small business customers with deposits up to ₹7.5 crore
When does this circular take effect?
The instructions are effective from the date of the circular.