RBI-Banks Meeting
RBI to meet banks Wed to discuss liquidity management framework, say sources
This story was originally published at 20:35 IST on 15 May 2025
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--Sources: RBI to meet banks Wed to discuss liquidity management framework
NEW DELHI – The Reserve Bank of India has called some banks for a meeting on Wednesday to discuss changes to the central bank's liquidity management framework, treasury officials told Informist. This would be the second formal meeting with banks on the framework.
"The invite has gone to only select banks it seems," one of the officials said. "There is nothing much beyond the headline, which is asking banks to come and give their inputs on the liquidity management framework that is under review."
The RBI had last met bankers on Apr. 3 to discuss updates to its liquidity management framework, which dates back to February 2020, with 14-day variable rate repo and reverse repo operations acting as the main instruments to manage temporary liquidity mismatches. Officials said some changes have already taken effect de facto, such as the return to daily liquidity operations since mid-January. This was reportedly a key demand from bankers in the first meeting.
Changes to the liquidity framework are likely as the weighted average call rate--the operating target of monetary policy--has over the years ceased to be representative of money market rates, sources said, with the call market's share in total money market volumes falling to just 2.3% in 2023-24 (Apr-Mar) from 21.5% in FY12. The central bank in December proposed the introduction of a new benchmark rate called the Secured Overnight Rupee Rate, or SORR, as an alternate benchmark based on secured funding rates. End
Reported by Pratiksha and Aaryan Khanna
Edited by Akul Nishant Akhoury
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