RBI News – On April 21, 2025, the RBI, led by Governor Sanjay Malhotra, mandated a 2.5% additional run-off factor for retail deposits linked to internet and mobile banking, lower than the proposed 5%.
Highlights
- RBI Governor Sanjay Malhotra introduced a 2.5% run-off factor for digital deposits,
- Effective April 2026, to enhance banking stability. The LCR norms address digital banking risks.
RBI Strengthens LCR Norms for Digital Deposits in 2025
The total run-off factor was set at 20%, effective April 1, 2026, to protect banks from sudden withdrawals. The Liquidity Coverage Ratio (LCR) guidelines were deferred by a year, offering banks relief. Malhotra emphasized prudent risk management amid rising digital banking risks.
The move aimed to enhance financial stability, requiring banks to adjust liquidity buffers, potentially impacting profitability but strengthening resilience. This regulation under Malhotra’s leadership reflected the RBI’s focus on balancing innovation and stability in India’s banking sector.
