On November 29–30, Indian banks borrowed over ₹6 billion via RBI’s Marginal Standing Facility, reflecting short-term liquidity stress. RBI reported average daily cash reserve requirements of ₹7.40 trillion for the fortnight ending December 12, with banks’ cash balances at ₹8.32 trillion. Analysts see this as proactive liquidity management.
Fresh data from the Reserve Bank of India (RBI) revealed that Indian banks borrowed ₹3.07 billion under the Marginal Standing Facility (MSF) on November 30, following borrowings of ₹3.12 billion a day earlier. The back-to-back usage of the MSF highlights tightening liquidity conditions in the banking system.
Key highlights of the update:
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RBI reported that the average daily cash reserve requirement for the two weeks ending December 12 stands at ₹7.40 trillion, underscoring the scale of liquidity obligations.
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On November 29, banks’ cash balances were ₹8.32 trillion, reflecting adequate reserves but also pointing to short-term mismatches that prompted MSF borrowings.
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The MSF, a window for banks to borrow overnight funds from the RBI at a higher rate, is typically used during temporary liquidity stress.
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Analysts note that the repeated borrowings suggest tight cash positions amid year-end demand, tax outflows, and global market volatility.
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RBI’s monitoring of liquidity ensures stability, balancing banks’ funding needs with broader monetary policy objectives.
This real-time update underscores the dynamic liquidity management in India’s financial system, with banks relying on RBI’s support to meet short-term obligations.
Sources: Reuters, Economic Times, Business Standard