MUMBAI (Reuters) - The Reserve Bank of India (RBI) eased a mandatory liquidity rule on Thursday, by tweaking its liquidity coverage ratio requirements for banks.
In a circular the RBI said it would allow banks to account for up to two percentage points more of government securities, held in their statutory liquidity ratio reserves, to help them meet liquidity coverage ratio norms.
The move will ease tight cash conditions to some extent as it will reduce pressure on banks to buy more government securities to maintain high quality liquid assets, as mandated under global Basel III norms.
(Reporting by Suvashree Choudhury, Editing by Euan Rocha and Kim Coghill)
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