RBI proposes to introduce liquidity coverage ratio for NBFCs - News Summed Up

RBI proposes to introduce liquidity coverage ratio for NBFCs


BENGALURU: The Reserve Bank of India (RBI) on Friday proposed introducing a liquidity coverage ratio (LCR) for large non-banking finance companies (NBFC) to help tackle liquidity problems in the sector. The central bank said it planned to implement LCR, a liquidity buffer, "in a calibrated manner" over four years starting from April 2020. The LCR is proposed for all deposit taking NBFCs, and non-deposit taking NBFCs with an asset size of 50 billion rupees ($720 million) and above. NBFCs will have to maintain minimum high quality liquid assets of 100% of total net cash outflows over the following 30 calendar days. The collapse of the Infrastructure Leasing and Financial Services (IL&FS) last year triggered a series a defaults across the shadow banking sector, as borrowing costs for the sector surged.


Source: Mint May 24, 2019 14:55 UTC



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