In the first quarter of FY27, revised liquidity coverage ratio (LCR) norms came into effect, reducing the assumed run-off rate on deposits from non-financial entities such as trusts, limited liability partnerships (LLPs), and partnerships to 40% from 100% earlier. The change lowered projected 30-day cash outflows for banks, providing flexibility to the LCR mandate.

Banks' leverage on FCNR(B) deposits could pressure profit margins. Overseas interest rates are lower, and lending spreads remain thin. This impacts banks with lower funding costs,…

These deposits pose a concentration risk if they attract just a set of high net worth NRIs. This heightens liquidity risk as well