Liquidity Drama Unfolds: Banks Tap RBI Lifeline Amid Zero Surplus

India's banking system faced moderate liquidity strain on December 10, with RBI disclosing key metrics via Reuters. Banks held ₹7.25 trillion in cash balances with the central bank, down from recent peaks amid seasonal outflows and government spending pauses. The nil government surplus cash balance triggered no auction, tightening available funds further.

RBI injected ₹89.75 billion through refinance facilities to support credit flow, while banks drew ₹9.46 billion via the Marginal Standing Facility (MSF) overnight window—indicating short-term funding needs. These moves align with RBI's proactive stance ahead of quarter-end CRR and SLR adjustments.

Key Highlights:

Cash Balances: ₹7.25 trillion (banks with RBI).

Govt Surplus: Nil cash for auction on Dec 10.

Refinance Injection: ₹89.75 billion provided by RBI.

MSF Borrowings: ₹9.46 billion utilized by banks.

Implications: Signals tightening; watch for repo/MSF trends.

Sources: Reuters (RTRS) RBI data releases.