By News Desk 
In a significant move to strengthen the financial resilience of banks, the Reserve Bank of India (RBI) has rolled out updated norms regarding the Liquidity Coverage Ratio (LCR). These revised regulations are set to be implemented from April 1, 2026. Initially floated as a draft proposal on July 25, 2024, the changes underwent a public consultation phase, during which banks and financial experts submitted feedback. After carefully reviewing the inputs, the RBI has finalized and issued the new framework.
Digital Accounts to Face Additional Liquidity Requirements
Under the revised rules, banks will now be required to apply an additional 2.5% run-off rate to retail and small business accounts that are accessible via internet and mobile banking. The rationale behind this is to prepare banks for potential mass withdrawals that could occur due to digital convenience or panic during financial uncertainty.
By factoring in the higher volatility of digital accounts, the RBI aims to ensure that banks have enough liquid assets in reserve to maintain operations smoothly—even under pressure.
What This Means for Customers and Small Businesses
While this policy targets back-end liquidity management, it may still indirectly impact digital users, especially small traders and everyday customers who rely on mobile and internet banking. However, financial analysts suggest that this step will help banks better assess and manage risks linked to digitally active accounts, ultimately leading to greater financial system stability.
Understanding LCR: A Safety Net for Banks
The Liquidity Coverage Ratio (LCR) is a key risk management metric that requires banks to hold sufficient high-quality liquid assets (HQLAs) to cover net cash outflows for a minimum of 30 days during times of financial stress. It serves as a safeguard, ensuring that banks can stay operational even if there is a sudden spike in withdrawals.
With these new guidelines, the RBI is reinforcing its commitment to a secure and shock-resistant banking ecosystem. Although the rules demand more from banks in terms of liquidity planning, they ultimately benefit depositors and the broader economy, especially during periods of economic turmoil.