The data also showed $11.9 billion in borrowing from the Fed's new emergency backstop known as the Bank Term Funding Program, which was launched Sunday
They suggested that the central bank could look at a reasonable cap to the FLDG models, given RBI's concerns of around build-up of systemic risk and 100% risk transfer rather than banning it outright
The fall in the liquidity surplus is owing to multiple factors, including the RBI's interventions in the forex market and a sharp pick-up in bank credit growth, which is currently at nine-year highs
Liquidity in India's banking system is likely to remain in deficit in the second half of this financial year as credit growth picks up and the circulation of currency notes rises, analysts said
RBI meant strict business, with a focus on alleviating financing constraints for economic stakeholders at the grass root level bearing a disproportionate burden of the ravaging Covid second wave
As of Monday, the banking system liquidity was at a surplus of Rs 4.95 trillion, as against Rs 6.13 trillion a week earlier, on the eve of the deadline for the third instalment of advance tax
Instead of pushing up inflation, the huge surplus liquidity, bordering at Rs 7 trillion daily, is helping in policy rate transmission and aiding govt to borrow at a cheaper rate
Decision taken based on requests received from banks; exposures under this facility will not be reckoned under large exposure framework or for determining priority sector targets
