The group is expected to submit the report by mid-July.

To review the liquidity management framework, the Reserve Bank of India (RBI) will set up an internal working group, which will suggest measures to simplify the current framework, last reviewed in 2014. The group is expected to submit the report by mid-July.

"It has been decided to constitute an internal working group to review comprehensively the existing liquidity management framework and suggest measures, among others, to simplify the current liquidity management framework; and clearly communicate the objectives, quantitative measures and toolkit of liquidity management by the RBI," the statement of developmental and regulatory policies noted.

Outlining the regulatory measures decided upon at the RBI monetary policy meet, the statement observed that though the current liquidity management framework worked well this far, it had become somewhat complex.

The assessment of liquidity position by different market participants had varied markedly and was not always in sync with the actual systemic liquidity position of the economy, it said.

The RBI also decided to peg the minimum leverage rate at 4 per cent for "domestic systemically important banks" and 3.5 per cent for other lenders, with a view to move towards harmonisation with Basel-III standards, which is a set of international banking regulations designed to reduce damage to the economy by banks that take on excess risk.

Leverage ratio is a financial measurement of capital inflows in terms of debt or loans and assesses the ability of a company to meet its financial obligations.

The RBI also announced that a foreign exchange trading platform for retail participants developed by the Clearing Corporation of India (CCIL) was ready and would be available for transactions from early August.

The apex bank had in October 2017 issued a paper proposing to set up such an electronic platform on which retail participants would be able to purchase and sell foreign currency at market clearing prices, while ensuring fair and transparent pricing.

The circular on the operational guidelines for the platform will be issued by the end of this month, the statement said.