Bond fears prompt RBI caution on liquidity ratio reform

Moving away from a dual liquidity regime could be "self defeating", says regulator


The Reserve Bank of India is taking a cautious approach to rolling back India's existing liquidity risk framework as it implements the Basel III liquidity coverage ratio, over fears that sudden moves could hit the value of banks' government bond holdings and increase balance sheet volatility, according to an executive director at the central bank.

The RBI is phasing the LCR's introduction in line with the timeline suggested by the Basel Committee on Banking Supervision – India's banks were

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