RBI Tightens Liquidity Norms for Digital Deposits, New Rules Effective April 2026

RBI noted that banks must now assign an additional 2.5 per cent run-off factor to retail deposits that are accessible via internet and mobile banking (IMB) services.

In addition to changes affecting retail deposits, the RBI has revised the treatment of wholesale funding sourced from non-financial legal entities.

Source : Freepik

In a move aimed at fortifying banks against liquidity risks triggered by digital withdrawals, the Reserve Bank of India (RBI)  issued fresh guidelines requiring lenders to apply a higher liquidity buffer for deposits accessed through the internet and mobile banking platforms.

The new rules, set to take effect from April 1, 2026, were announced via a circular issued by the central bank on Monday.

According to the RBI, banks must now assign an additional 2.5 per cent run-off factor to retail deposits that are accessible via internet and mobile banking (IMB) services, reported PTI.

This means that stable deposits with IMB access will carry a 7.5 per cent run-off rate, while less stable ones will carry a 12.5 per cent rate—an increase from the current 5 and 10 per cent, respectively.

Revised Norms Based on Global Experiences and Stakeholder Inputs

The change is part of a revised liquidity risk management framework, developed over the past year, and follows instances in some overseas markets where customers rapidly moved funds using digital tools during financial crises.

The new framework takes into account feedback from banks and industry participants on the draft guidelines titled ‘Basel-III Framework on Liquidity Standards – Liquidity Coverage Ratio (LCR) – Review of Haircuts on High Quality Liquid Assets (HQLA) and Run-off Rates on Certain Categories of Deposits’, which the RBI  circulated in July last year.

Initially, the draft had proposed a steeper 5 per cent additional run-off for IMB-enabled deposits, translating to 10 per cent for stable and 15 per cent for less stable categories. However, after stakeholder consultation, the RBI opted for a more moderate increase and deferred the implementation timeline to April 2026. The earlier proposal  set April 2025 as the rollout date.

Broader LCR Framework Sees Additional Refinements

In addition to changes affecting retail deposits, the RBI has revised the treatment of wholesale funding sourced from non-financial legal entities. Under the new norms, funds from entities such as trusts—educational, religious, or charitable—as well as partnerships and LLPs, will now attract a lower run-off rate of 40 per cent, compared to the existing 100 per cent.

The central bank conducted an internal impact study using data as of December 31, 2024. "It is estimated that the net impact of these measures will improve the LCR of banks, at the aggregate level, by around 6 percentage points as on that date," the RBI stated.

The regulator assured that "all banks will continue to meet the minimum regulatory LCR requirements comfortably." The RBI added that the staggered implementation will allow banks ample time to adjust their systems. “Reserve Bank is sanguine that these measures will enhance the liquidity resilience of banks in India, and further align the guidelines with the global standards in a non-disruptive manner,” the circular noted.

Internet and Mobile Banking (IMB) includes platforms such as internet banking, mobile apps, and UPI—any interface that enables retail or small business customers to move funds digitally.