Facility to Avail Liquidity for Liquidity Coverage Ratio (FALLCR)

To understand FALLCR, one first needs to understand LCR (Liquidity Coverage Ratio).

LCR is a short term liquidity ratio to be maintained by banks in form of high quality liquid assets (HQLA) to survive an acute stress scenario lasting for 30 days. LCR should be 100% or more i.e. at a minimum, the stock of liquid assets should enable the bank to survive until day 30 of the stress scenario, by which time it is assumed that appropriate corrective actions can be taken.

The HQLA, as per BASEL III, should include assets that can be easily and immediately converted into cash at little or no loss of val ue (i.e. near cash assets). This would include cash and G-secs.

FALLCR is that part of the G-secs under SLR that can be pledged to raise liquid assets to meet LCR requirement under BASEL III. 

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