Mumbai, January 28, 2025: The Reserve Bank of India (RBI) may consider easing Liquidity Coverage Ratio (LCR) norms to support banks facing tight liquidity conditions, according to a report by Jefferies. The report highlights that banks are under pressure due to reduced surplus liquidity in the financial system, driven by factors such as high credit demand and the withdrawal of pandemic-related support measures.
Easing LCR norms could provide banks with greater flexibility to manage their liquidity buffers while ensuring regulatory compliance. Jefferies noted that such a move would enable banks to allocate more funds for lending, boosting credit growth in the economy. The report also suggests that the RBI may announce targeted liquidity measures to address short-term imbalances and stabilize the financial system.
