Under the new norms, wholesale funds, especially funds of trusts, partnerships and limited liability partnerships (LLPs) will attract lower outflow factors from FY27, reducing expected outflows in a stress scenario.
In contrast, lenders that rely heavily on retail deposits, largely public sector banks, will see relatively little benefit from changes in operating assumptions, experts said.
“The reduction in the operating factor from April 2026 will be transferred to the deposits of trusts, partnerships and LLPs, which had higher flows. Different banks will have different shares of these deposits, and hence will benefit accordingly, but the benefits of public sector banks may be less than that of private sector banks,” said Alok Singh, CSB Banking Director, CSB treasury.
In the new norms that the RBI released in April 2025, trusts, partnerships, LLPs will attract a lower run-off rate of 40% against the current 100%. The central bank said the estimated net effect of these measures would be to increase banks’ LCR by around 6 percent overall.
LCR for HDFC Bank and ICICI Bank stands at 116% and 126% respectively. Of the total deposits, HDFC Bank has 83% wholesale deposits and 17% retail deposits, positioning it to gain from future LCR changes. While ICICI Bank did not disclose the share of wholesale-retail deposits in its investor presentation, the share of CASA deposits that are largely retail is 40%.
SBI and Bank of Baroda, the top two PSU banks have LCR of 125% and 116% respectively. SBI has a CASA share of 41%, while Bank of Baroda has a CASA share of 38%.
