Basel III Framework on Liquidity Standards – Net Stable Funding Ratio (NSFR) – Review of National Development Banks

RBI/2023-24/103
DOR.LRG.REC.62/03.10.001/2023-24

December 29, 2023

Madam / Dear Sir,

Basel III Framework on Liquidity Standards – Net Stable Funding Ratio (NSFR) – Review of National Development Banks

Please refer to circular DBR.BP.BC.No.106/21.04.098/2017-18 dated May 17, 2018 on Basel III Framework on Liquidity Standards - Net Stable Funding Ratio (NSFR) – Final Guidelines.

2. NABARD, NHB and SIDBI are considered as National Development Banks (NDBs) under the extant NSFR framework. On a review, it has been decided that the other All India Financial Institutions (AIFIs) i.e. EXIM Bank and National Bank for Financing Infrastructure and Development (NaBFID) shall also be considered as NDBs for NSFR computation.

3. Further, unencumbered loans to NDBs with a residual maturity of one year or more that would qualify for a 35 per cent or lower risk weight under the Standardised Approach for credit risk1 shall be assigned a Required Stable Funding (RSF) factor of 65 per cent (as against 100 per cent currently).

4. Accordingly, the select instructions have been amended as detailed in Annex.

Applicability

5. This circular is applicable to all Scheduled Commercial Banks (excluding Payments Banks and Regional Rural Banks).

6. These instructions shall come into force with immediate effect.

Yours faithfully

(R. Lakshmi Kanth Rao)
Chief General Manager-in-Charge