Basel Norms & India: Implementation, Challenges
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In July 2024, the Reserve Bank of India (RBI) issued a circular introducing tighter liquidity norms for banks under the Basel III framework. These changes come as a response to the rapid growth in internet and mobile banking, which has introduced new risks to the banking system. The RBI's updated guidelines impose higher liquidity requirements, including an additional 5% run-off factor on retail deposits facilitated through digital banking channels. This move aims to strengthen banks’ liquidity buffers, ensuring they can manage large-scale, unexpected withdrawals in an increasingly digital environment.
What are Basel Norms?
Basel norms are internationally recognized regulatory f
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