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SDF Balances Now Count as HQLA for LCR

No longer current — withdrawn, no replacement on file yet

Source: Reserve Bank of India · RBI/2022-23/141 · issued 23 Nov 2022 · ~1 min read

Quick answerRBI has clarified that overnight balances parked by banks under the Standing Deposit Facility (SDF) qualify as Level 1 High Quality Liquid Assets (HQLA) for computing the Liquidity Coverage Ratio (LCR), effective immediately.

What changed

RBI confirmed that overnight SDF balances are eligible as Level 1 HQLA for LCR computation, effective from November 23, 2022.

What it means for you

Banks can now treat SDF deposits as high-quality liquid assets, improving their LCR without needing additional government securities or cash. This reduces the cost of maintaining liquidity buffers and offers more flexibility in liquidity management.

Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.

What banks were required to do at the time

Update your LCR computation models to include overnight SDF balances as Level 1 HQLA.
Review liquidity contingency plans to leverage SDF for buffer management.
Ensure treasury and ALM teams are aware of this classification for reporting.
Monitor any future RBI clarifications on intraday or term SDF treatment.

Who it affects

All commercial banks (excluding LABs, RRBs, and Payments Banks), Treasury and ALM departments, Risk management teams handling LCR reporting

❓ Common questions

Regulatory timeline

Stated effective date effective from November 23, 2022
Decoded by BankPulse 2026-06-18 05:22 IST
repealed_by — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
Status change: withdrawn 03 Aug 2026, 04:00 IST

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

Can term SDF deposits also be counted as HQLA?

The circular specifically addresses overnight balances only. Term SDF deposits are not mentioned, so they should not be treated as HQLA until further clarification.

Does this change affect the LCR calculation for all banks?

Yes, for all commercial banks covered by the circular. Local Area Banks, Regional Rural Banks, and Payments Banks are excluded from this instruction.

When does this clarification take effect?

The instructions are effective immediately from the date of the circular, November 23, 2022.

📜 This document’s life story (1 recorded event, each backed by RBI’s own words)

Repealed by RBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)

RBI’s words: “Official withdrawal register entry #208: DOR.LRG.REC.83/03.10.001/2022-23 — "Basel III Framework on Liquidity Standards - Standing Deposit Facility" dated November 23, 2022”

📜 Read the original circular — full text as issued by RBI

RBI/2022-23/141
 DOR.LRG.REC.83/03.10.001/2022-23
 November 23, 2022
 Madam/Dear Sir,
 Basel III Framework on Liquidity Standards – Standing Deposit Facility
 Please refer to circular DBOD.BP.BC.No.120/21.04.098/2013-14 dated June 09, 2014 on ‘Basel III Framework on Liquidity Standards – Liquidity Coverage Ratio (LCR), Liquidity Risk Monitoring Tools and LCR Disclosure Standards’ and the Press Release 2022-2023/41 dated April 08, 2022 on operationalising of Standing Deposit Facility (SDF).
 2. We have received queries from banks seeking clarification on the treatment of SDF under Liquidity Risk Management Framework.
 3. Accordingly, it is advised that the overnight balances held by banks with RBI under SDF shall be eligible as ‘Level 1 High Quality Liquid Assets (HQLA)’ for computation of LCR. 
 Applicability
 4. This circular is applicable to all Commercial Banks (excluding Local Area Banks, Regional Rural Banks and Payments Banks).
 5. These instructions shall come into force with immediate effect.
 Yours faithfully
 (Usha Janakiraman)
 Chief General Manager

Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2022-23/141 · issued 23 Nov 2022. The plain-English explanation above is BankPulse’s own independent summary.

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Key termsPlain-English definitions of terms in this circular — see the full Indian banking glossary. CRAR (Capital adequacy) · Tier 1 & Tier 2 capital · Risk-Weighted Assets (RWA) · LCR (Liquidity Coverage Ratio)

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BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12413&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.