Liquidity coverage ratio norms for NBFCs to take effect from next Dec

Mumbai, Nov. 8 -- Liquidity coverage ratio (LCR) norms for non-banking financial companies (NBFCs) will take effect on 1 December 2020, the Reserve Bank of India (RBI) said on Monday, extending its previous date of 1 April.

According to the central bank's final guidelines on liquidity risk management framework for NBFCs and core investment companies, LCR, which refers to the share of high quality liquid assets to be set aside to meet short-term obligations, will be introduced in stages.

In its final guidelines, RBI said NBFCs with assets of '10,000 crore and above will have to maintain a minimum of 50% of LCR as high quality liquid assets (HQLA), while those with assets of '5,000-10,000 crore will have to maintain 30% LCR.

In both cases,...