38. Following the issue of final standards by BCBS, the Reserve Bank of India issued its final guidelines on ‘Liquidity Coverage Ratio (LCR), Liquidity Risk Monitoring Tools and LCR Disclosure Standards’ on June 9, 2014. The RBI’s guidelines have taken into account the range of HQLAs available in Indian financial markets and their liquidity vis-à-vis the liquidity instruments prescribed in the BCBS standard.
The balance sheets of Indian banks have adequate liquid assets due to the CRR and SLR requirements of 4% and 22% respectively of a bank’s NDTL. Any additional HQLA requirement on banks over and above CRR and SLR may reduce banks’ capacity to meet the growing credit needs of the economy. It also reduces competitiveness of banks in India vis-a-vis their international counterparts.