Pvt lenders to log higher liquidity coverage ratios gains on wholesale deposits

Under the new norms, wholesale deposits, particularly funds from trusts, partnerships and limited liability partnerships (LLPs), will attract lower run-off factors from FY27, reducing the assumed outflows in a stress scenario.

By contrast, lenders with a heavier reliance on retail deposits, largely public sector banks, would see a relatively smaller benefit from the changes to the run-off assumptions, experts said.

“The reduction in the run-off factor from April 2026 is driven towards deposits of trusts, partnerships and LLPs, which had a higher runoff. Different banks will have varying shares of these deposits, and therefore, will benefit accordingly, but benefits to public sector banks may be lower than private sector banks,” said Alok Singh, head of treasury at CSB Bank.

In the new norms that RBI released in April 2025, trusts, partnerships, LLPs will attract a lower run-off rate of 40% against 100% currently. The central bank said the estimated net impact of these measures will improve the LCR of banks, at the aggregate level, by around 6 percentage points.

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LCR for HDFC Bank and ICICI Bank stands at 116% and 126%, respectively. Of the total deposits, HDFC Bank has 83% of wholesale deposits and 17% of retail deposits, positioning it to gain from the upcoming LCR changes. While ICICI bank did not disclose the exact wholesale-retail deposit share in their investor presentation, its share of CASA deposits, which are largely retail is at 40%.
SBI and Bank of Baroda, the top two PSU banks have a LCR of 125% and 116%, respectively. SBI has a CASA share of 41%, while Bank of Baroda has a CASA share of 38%.