New LCR norms boost bank liquidity in Q1

The Reserve Bank of India changed some rules about how much money banks need to keep as reserves.

This change, which started in April 2026, makes it easier for banks to lend more money.

The rules now say that certain types of deposits, like those from trusts and partnerships, are less likely to be withdrawn quickly.

This means banks don't need to keep as much money in reserve, so they can use more of it to give loans.

Several big banks, like HDFC Bank and Kotak Mahindra Bank, have already increased their liquidity coverage ratio, which is a measure of how well they can handle financial stress.

This is good news for people who need loans, but it also means banks have to be careful about how they use their money.