Most banking stocks moved higher after the Reserve Bank of India (RBI) proposed more relaxed liquidity coverage norms. The RBI has directed banks to assign an additional 2.5% liquidity buffer rate to deposits of retail and small business customers enabled with internet and mobile banking (IMB), effective from April 1, 2026.

This is a revision from the earlier proposal in July 2023, which suggested a higher 5% run-off factor—representing the likelihood of deposit withdrawal, including under stressed scenarios.

Stock Performance:

• HDFC Bank is trading at RS. 1965.45, up by 37.90 points or 1.97% from its previous close of RS. 1927.55. It opened at RS. 1940.00, with a high of RS. 1970.65 and a low of RS. 1935.20.

• Kotak Mahindra Bank is trading at RS. 2285.80, rising by 43.25 points or 1.93% from RS. 2242.55. It opened at RS. 2256.55, hitting a high of RS. 2301.55 and a low of RS. 2247.65.

• ICICI Bank is trading at RS. 1414.00, up by 4.60 points or 0.33% from RS. 1409.40. The stock opened at RS. 1414.65, with a high of RS. 1418.50 and a low of RS. 1398.65.

Revised Guidelines Highlights:

• Stable retail deposits enabled with IMB will now carry a 7.5% run-off factor (up from 5%).

• Less stable IMB-enabled deposits will carry a 12.5% run-off factor (up from 10%).

• Implementation of these changes has been deferred to April 1, 2026, providing banks ample time to adjust systems accordingly.

• RBI has also adjusted the run-off factor for wholesale funding by non-financial entities such as trusts, partnerships, and LLPs, lowering it from 100% to 40%.

The central bank expects these changes to boost banks’ Liquidity Coverage Ratio (LCR) by approximately 6 percentage points on aggregate. RBI affirmed that Indian banks will continue to comfortably meet minimum LCR standards and emphasized that the revised framework aligns with global norms without causing market disruption.