Banking system's liquidity slips into deficit for first time in FY24

Mumbai, Aug 22, 2023 

India's banking system liquidity has slipped into deficit for the first time this financial year after the Reserve Bank of India's temporary liquidity withdrawal move and tax outflows.

Banking system liquidity stood at a deficit or 236 billion rupees ($2.84 billion) as of Aug. 21, according to RBI data.

Surplus had hit a high of Rs 2.8 trillion at the start of this month, but has since been dropping, especially after the RBI told banks to hold an incremental cash reserve ratio (CRR) of 10% on increase in deposits between May 19 and July 28, which has led to withdrawal of over one trillion rupees.

[Reuters]