India’s Banks Hold ₹8.19 Trillion Cash with RBI Amid Active Liquidity Moves

Image Source : Moneycontrol

On October 9, India's central bank data showed banks maintained cash balances of ₹8.19 trillion with the RBI. The government’s surplus cash balance available for auction was nil, while refinance stood at ₹90.38 billion. Banks borrowed ₹157.71 billion via Marginal Standing Facility, indicating active liquidity management.

In the latest central bank update for October 9, 2025, the Reserve Bank of India (RBI) reported significant liquidity data critical to understanding the financial ecosystem’s health. Banks’ cumulative cash balances with the RBI amounted to ₹8.19 trillion, reflecting ample liquidity availability and smooth functioning of the banking sector as the economy navigates ongoing demand and economic activities.

The Government of India, on the other hand, reported no surplus cash balance with the RBI that could be allocated for auctions, signifying tight public sector liquidity management amid fiscal priorities and expenditure commitments.

Refinance facilities extended by the RBI to banks totaled ₹90.38 billion, reinforcing the central bank’s role in ensuring credit flow and supporting banking operations during market fluctuations. Additionally, banks borrowed ₹157.71 billion through the Marginal Standing Facility (MSF), a short-term liquidity window used primarily for overnight funds against government securities, underscoring active liquidity management in the system.

These developments come ahead of the RBI’s monetary policy decisions for October 2025, expected to maintain a neutral stance to balance growth and inflation objectives. The repo rate, a key policy tool, is currently held steady at 5.5%.

Important Points:

Banks’ cash balances with RBI stood at ₹8.19 trillion on October 9, showing strong liquidity.

Government’s surplus cash balance with RBI was nil, indicating tight fiscal liquidity.

Refinance extended to banks was ₹90.38 billion, supporting liquidity and lending.

Borrowing under Marginal Standing Facility was ₹157.71 billion, reflecting short-term funding needs.

RBI’s monetary policy remains on hold with repo rate at 5.5%, reflecting balanced approach.

Data signals healthy cash flow in banking system while government manages fiscal pressures effectively.

This snapshot of India’s liquidity, refinancing, and cash balances highlights the central bank’s pivotal role in stabilizing economic activity and financial markets.

Sources: Reuters, Reserve Bank of India official release