The Reserve Bank of India on 23rd November 2022, has notified that the overnight balances held by banks with RBI under Standing Deposit Facility (SDF) shall be eligible as ‘Level 1 High Quality Liquid Assets (HQLA)’ for computation of Liquidity Coverage Ratio (LCR).
RBI made this announcement after banks sought clarification on treatment of SDF under the liquidity risk management framework and this circular shall be applicable to all Commercial Banks (excluding Local Area Banks, Regional Rural Banks and Payments Banks).
