Basel III Framework on Liquidity Standards – Net Stable Funding Ratio (NSFR) – Final Guidelines

RBI/2017-18/178

DBR.BP.BC.No.106/21.04.098/2017-18

May 17, 2018

All Scheduled Commercial Banks 

(excluding RRBs)

Dear Sir/Madam,

Basel III Framework on Liquidity Standards –

Net Stable Funding Ratio (NSFR) – Final Guidelines

The Net Stable Funding Ratio (NSFR) and Liquidity Coverage Ratio (LCR) are significant components of the Basel III reforms. The LCR guidelines which promote short term resilience of a bank’s liquidity profile have been issued vide circular DBOD.BP.BC.No.120/21.04.098/2013-14 dated June 9, 2014. The NSFR guidelines on the other hand ensure reduction in funding risk over a longer time horizon by requiring banks to fund their activities with sufficiently stable sources of funding in order to mitigate the risk of future funding stress.

2. The draft guidelines on the NSFR for banks in India were issued on May 28, 2015 for comments. The final guidelines, after considering comments received from various stakeholders, are given in the Annex for implementation from a date to be communicated in due course.

Yours faithfully,

(Prakash Baliarsingh)

Chief General Manager