Reserve Bank to stick to higher digitally-linked deposit buffer proposal

The Reserve Bank of India (RBI) has proposed maintaining a high digital deposit buffer, which is expected to impact bank liquidity. This measure is intended to address the growing digital banking sector and its implications for financial stability. By requiring banks to hold a larger buffer, the RBI aims to ensure that they remain resilient to fluctuations in digital deposit inflows and outflows. This proposal reflects the RBI’s proactive approach to managing the evolving banking landscape and maintaining overall financial stability.