Part Cash outflows - Banking (prudential standard) determination No. 3 of 2025 - Cash outflows

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Cash outflows

Retail deposit outflows

For the purposes of the LCR, retail deposits are defined as deposits placed with an ADI by a natural person. Deposits from legal entities, sole proprietorships or partnerships are captured in wholesale deposit categories. Retail deposits include demand deposits and term deposits, unless otherwise excluded under the criteria set out in paragraphs 41 and 42 of this Attachment.

Where a person places funds with an intermediary, which then places those funds with an ADI, the deposit with the ADI is considered to be a deposit from a financial institution unless, during the next 30 days:
1.  the person retains all legal rights regarding the withdrawal or other movement of the funds;
2.  the person exercises these rights in practice and cannot transfer these rights to the intermediary;
3.  there is clear and prominent disclosure to the person that the funds will be placed with the ADI; and
4.  the intermediary or an associated entity can neither make investment decisions on behalf of the person regarding the deposit, nor withdraw funds from the ADI in the absence of specific directions to do so from the person (other than miscellaneous items such as fees, expense reimbursements, taxes).

If all of these conditions are satisfied, an ADI may treat the funds as if they are from the person. An ADI must be able to demonstrate how this treatment satisfies the conditions outlined in this paragraph.

Retail deposits are divided into stable and less stable portions of funds, as described below.

Stable deposits are the portion of deposits that are fully covered by the Financial Claims Scheme (or an effective government deposit insurance scheme) where:

the depositor has other established relationships with the ADI that make deposit withdrawal highly unlikely; or
the deposits are in transactional accounts (e.g. accounts where salaries are automatically credited).

Less stable deposits are the portion of deposits that do not meet the requirements of stable deposits.

Certain types of deposits are considered more likely to be withdrawn in a time of stress. These include high-value deposits (i.e. deposits above any government deposit guarantee limit), deposits from customers who do not have established relationships with an ADI that would make the deposit withdrawal unlikely, deposits where the internet is integral to the design, marketing and usage of the account (on-line accounts) and deposits with promotional interest rates (heavily rate-driven).

An ADI must assess each less stable account or product balance against the following scorecard:

Table 1 – The scorecard

Criteria	Score
Deposit balance is greater than any government deposit guarantee limit where it exists and, in its absence, where the deposit balance is greater than the equivalent of AUD 250,000	2
Deposit is an on-line account	2
Absence of an established customer relationship	1
Deposit is heavily rate‑driven	1

Score	Run-off rate
0 – 2	10 per cent
3 or more	25 per cent

Run-off rate (%)	Cash outflow category
	Retail and qualifying SME deposits (refer to paragraphs 34 to 40 and 46)
5	Stable deposits
10	Less stable retail deposits
25	Higher run-off less stable retail deposits
	Unsecured wholesale funding (refer to paragraphs 44 to 46)
5	Operational deposit balances from all counterparties fully covered by deposit insurance
25	Operational deposit balances from all counterparties not fully covered by deposit insurance
	Non-operational deposits from non-financial corporations, sovereigns, central banks, PSEs, MDBs and SMEs of greater than AUD 2m:
20	where the entire amount is fully covered by deposit insurance
40	where the entire amount is not fully covered by deposit insurance
100	All other non-operational deposits
100	Unsecured debt issuance
	Secured funding
0	Secured funding transactions backed by HQLA1, with any counterparty
0	Secured funding transactions with any counterparty backed by CLF-eligible debt securities, where the ADI pledging assets has a CLF with the RBA subject to the ADI’s CLF limit

Run-off rate (%)	Cash outflow category
	Secured funding (continued)
15	Secured funding transactions backed by HQLA2A, with any counterparty
25	Secured funding transactions that are not eligible for inclusion in the 0 or 15 per cent categories above where the counterparties are domestic sovereigns, PSEs (but not the RBA) or MDBs with a risk weight of 20 per cent or lower under APS 112Secured funding transactions backed by RMBS eligible for inclusion as HQLA2B
50	Secured funding transactions backed by other HQLA2B with any counterparty
100	All other secured funding transactions
	Asset‑backed commercial paper (ABCP), asset backed securities, covered bonds and other structured financing instruments/facilities
100	Maturing transactions issued by the ADI itself
100	Loss of funding on SPVs, conduits and structured investment vehicles due to inability to refinance maturing debt, embedded options and other potential loss of funding
	Increased liquidity needs related to derivatives and other transactions
100	Derivatives cash outflows[5]
100	Collateral that would need to be posted as a result of a downgrade of 3-notches of the ADI

Run-off rate (%)	Cash outflow category
	Increased liquidity needs related to derivatives and other transactions (continued)
100	Excess non-segregated collateral held by the ADI that could contractually be called at any time by the counterparty
100	Contractually required collateral on transactions for which the counterparty has not yet demanded the collateral be posted
100	Contracts that allow collateral substitution to non-HQLA– the amount of HQLA that may be substituted without the ADI’s consent
100 per cent of the largest absolute net 30-day collateral flow realised in the past 24 months[6]	Collateral outflows due to market valuation changes on derivative transactions and other transactions
20	Valuation changes on posted non-HQLA1 collateral securing derivatives and other transactions
	Committed facilitiesFor the undrawn portion of committed credit and liquidity facilities:
5	to retail and SME customers
	to non-financial corporate, sovereigns and central banks, PSEs:
10	credit facilities
30	liquidity facilities
40	to banks and other ADIs subject to prudential supervision

Run-off rate (%)	Cash outflow category
	Committed facilities (continued)For the undrawn portion of committed credit and liquidity facilities:
	to other financial institutions:
40	credit facilities
100	liquidity facilities
100	Other legal entity customers
	Other contingent funding obligations
5	Revocable credit and liquidity facilities
Average of actual monthly net outflows in a recent 12‑month period	Trade finance related obligations
50 per cent of the average of actual monthly net outflows in a recent 12‑month period	Guarantees and letters of credit other than trade finance related obligations
10 per cent for short‑term securities and 5 per cent for long‑term securities unless otherwise agreed with APRA	Buybacks of domestic Australian debt securities
5	Non-contractual obligations related to structured products and managed funds
To be set by the ADI unless APRA determines the rate for the ADI	Issuers with an affiliated dealer or market maker
To be set by the ADI unless APRA determines the rate for the ADI	Other non-contractual contingent funding obligations
100	Other contractual cash outflows