MUMBAI, Nov 7 (Reuters) - The Indian central bank set
tolerance limits for mismatches between assets and resources and
also asked banks to restrict their risk exposures to within 10
years, as part of the final guidelines on liquidity risk
management, released on Wednesday.
"Long term resources should not fall below 70 percent of
long term assets; and (b) long and medium term resources
together should not fall below 80 percent of the long and medium
term assets," the Reserve Bank of India said.
The central bank also asked lenders to make public
disclosures on a regular basis that will help market
participants to make informed judgments about the soundness of
its liquidity risk management framework and liquidity position.
The RBI also advised banks to conduct stress tests at
regular intervals and across different maturities and profiles.
"Banks are encouraged to have stress tests with various
survival horizons in mind, say one month or less; two or three
months; and six months or more, etc," the RBI said.
The RBI has asked banks to put in place the guidelines on
intra-day liquidity risk management strategy by Dec. 31.
(Reporting by Neha Dasgupta and Suvashree Dey Choudhury;
Editing by Sunil Nair)