RBI's New Chief Eases Pressure on Banks with Liquidity Ratio Delay

Reserve Bank's new Governor Sanjay Malhotra announced a deferment of the liquidity coverage ratio, aiming for a phased implementation. He emphasized balancing financial stability with regulation costs, promising to review each regulation's impact. His predecessor's strict stance had raised concerns about stifling credit growth.

In a significant move for banks, the new Governor of the Reserve Bank, Sanjay Malhotra, disclosed plans to delay the implementation of the liquidity coverage ratio by at least one year, aiming for a gradual rollout.

Speaking to the media for the first time after his appointment in December, Malhotra emphasized the importance of financial stability but acknowledged the necessity to assess the regulatory costs, ensuring efficient resource utilization under his leadership.

Malhotra's approach contrasts with that of his predecessor, Shaktikanta Das, whose stringent policies aimed at financial stability raised concerns about hampering credit growth amid already slowing GDP expansion.

(With inputs from agencies.)