More Stories

Informist, Friday, Apr. 17, 2026

By Durgesh Nandan

MUMBAI — The three-day interbank call money rate Friday ended above the Reserve Bank of India's Standing Deposit Facility rate of 5.00% on Friday on late demand for funds from a bank to meet their daily requirements, dealers said. However, the call rate was below RBI's repo rate of 5.25% on the back of ample surplus liquidity, they added. The RBI conducted a seven-day variable rate reverse repo auction Friday for INR 2 trillion and accepted offers worth the entire notified amount at a cut-off rate of 5.24%. 

The three-day call money rate ended at 5.11% Friday, marginally up from 5.10% for one-day loans Thursday. The weighted average rate was 5.11%, up from 5.09% Thursday. Volume in the call-money rate was INR 153.40 billion, lower than INR 205.15 billion Thursday.

Rates in the overnight market will rise next week due to the scheduled goods and services tax outflow, dealers said. The three-day tri-party repo rate ended at 4.90% Friday, lower than Thursday's close of 5.00% for one-day loans. However, the weighted average rate was 4.94%, higher than 4.78% Thursday. The volume in the tri-party repo market was INR 4.36 trillion. The tri-party repo market rate is being constantly traded below the SDF rate due to surplus liquidity available with mutual funds, dealers said.

Mutual funds have ample liquidity due to investments at the beginning of this financial year 2026–27 (Apr-Mar). Despite the investment in government securities and corporate bonds, mutual funds still have surplus liquidity left with themselves and low demand for funds kept the tri-party market rate below the SDF rate, dealers said.

Cash balances with the RBI rose sharply to INR 8.39 trillion Thursday from INR 7.46 trillion the previous day as the new reporting fortnight began, due to an increase in net demand and time liabilities as of Mar. 31. It led to a fall in surplus liquidity below INR 5 trillion for the first time since Apr 10. As per the latest figures, the net liquidity absorbed by the Reserve Bank of India, a proxy for surplus liquidity in the banking system, was INR 4.09 trillion Thursday, down from INR 5.21 trillion Wednesday. It is usual for banks to maintain the higher CRR requirements at the beginning of each fortnight if there is a surplus liquidity in the banking system, dealers said. 

"By maintaining more than 100% in CRR (cash reserve ratio) with the RBI, banks have built the position at the beginning of the fortnight so that they can keep 95% or less than required by the RBI," a dealer at a large public-sector bank said. "If rates are higher later or there will be any liquidity crunch after GST (goods and services tax) outflows, then banks would not stress over CRR maintenance."

The VRRR auction conducted Friday was oversubscribed for INR 2.28 trillion due to higher returns at 5.24%, which was preferred over the overnight market offering a lower rate, dealers said. The RBI had also conducted a seven-day VRRR for INR 2 trillion on Apr. 10.

OUTLOOK

On Saturday, the two-day call money rate is likely to open at 5.05-5.15% in a thin trade, as is usually seen on working Saturdays. Dealers expect the call rate around 4.80–5.10% during the day, whereas the tri-party repo rate is expected in the range of 4.80–5.00% on the back of ample surplus liquidity in the banking system.  

Outflows for payment of goods and services tax of INR 1.8 trillion–INR 2 trillion is scheduled by Wednesday, but liquidity is still seen in ample surplus even after the payments, dealers said.

CALL RATE

5.11%--Friday close for three-day loans

5.15%--Friday open for three-day loans

5.10%--Thursday close for one-day loans

BENCHMARK MIBOR (in %)  

Mumbai Interbank Outright Rates compiled by Financial Benchmarks India:

India Call: Falls on low demand, surplus liquidity; rates seen up near close

MUMBAI – The three-day interbank call money rate Friday was lower than its opening level after the usual demand for funds from primary dealerships and some banks was met early in the day, dealers said. The weighted average rate in the overnight market rose slightly due to increased demand for funds from banks as they parked INR 2 trillion at the Reserve Bank of India's seven-day variable rate reverse repo auction.

At 1540 IST, the three-day call-money rate was 4.90%, sharply down from Friday's opening at 5.15% and also down from 5.10% Thursday. The weighted average call rate was 5.11%, higher than 5.09% Thursday. Trade volume in the call money market was INR 146.29 billion. The call money rate may rise towards the the market close at 1900 IST as banks step up borrowing to meet their three-day funding requirements, dealers said.

The three-day tri-party repo rate ended at 4.90% Friday, lower than Thursday's close of 5.00%. The weighted average rate was 4.94%, higher than 4.78% Thursday. The volume in the tri-party repo market was INR 4.36 trillion. The tri-party repo market rate is being constantly traded below the SDF rate due to surplus liquidity available with mutual funds, dealers said.

"Due to the investments at the beginning of the financial year (that began in April) mutual funds are sitting with a lot of cash and even after investment in government securities and corp (corporate) bonds, they still have ample liquidity left with themselves," a dealer at a state-owned bank said.

"Banks borrowed from the overnight market yesterday (Thursday) at low rates and kept it with the RBI as there is high chance that rates in the overnight market could rise later next week," a dealer at another public-sector bank said. "We could see the volume in the call market was higher than usual." Volume in the call-money market was INR 205.14 billion Thursday against the usual volume of INR 150 billion in the last one week.

For the fortnight ending Apr. 30, banks have to maintain an average daily cash balance of INR 8.07 trillion, a larger-than-usual rise from INR 7.76 trillion for the Apr. 15 fortnight. The cash requirements for the current reporting fortnight are based on banks' net demand and time liabilities as of Mar. 31. The seasonal jump in deposit accretion at the end of the financial year 2025-26 (Apr-Mar) led to the increase in reporting requirements for the cash reserve ratio, dealers said. 

With the rise in cash needs, banks parked funds with the RBI Thursday from the overhang in the SDF window. They wanted to maintain more than the average requirements at the beginning of the fortnight, dealers said. Cash balances with the RBI rose sharply to INR 8.39 trillion Thursday from INR 7.46 trillion the previous day as the new reporting fortnight began. As per the latest figures, the net liquidity absorbed by the RBI was INR 4.09 trillion Thursday, lower than INR 5.21 trillion Wednesday.

"Banks have maintained more than the required average now, because next week after GST (goods and services tax) outflows, there might be a liquidity crunch in the system and banks will not want to face a liquidity crunch at that time," a dealer at another public-sector bank said. "...and this is usual from banks to maintain surplus in CRR at the beginning of the fortnight so, after one week they will have to maintain less than required."

Friday's INR-2-trillion, seven-day VRRR auction conducted by the RBI was oversubscribed as banks had ample surplus liquidity with them. The returns offered by the central bank, of up to 5.24%, were preferred to parking the money in money markets at lower rates, dealers said. The auction had a cut-off rate of 5.24% and a weighted average rate of 5.23%. (Durgesh Nandan) 

India Call: Dn as early demand met; bks' demand up as VRRR fully subscribed

MUMBAI – The three-day interbank call money rate Friday was lower than Thursday's closing level after the usual demand for funds from primary dealerships and some banks was met early in the day, dealers said. The weighted average tri-party repo rate rose Friday due to increased demand for funds from banks as they parked INR 2 trillion at the Reserve Bank of India's seven-day variable rate reverse repo auction at 0930-1000 IST.

The call money rate was below the RBI's Standing Deposit Facility rate of 5.00% due to ample liquidity in the banking system. The tri-party repo rate was below the RBI's Standing Deposit Facility rate due to surplus liquidity with mutual funds and weak demand for funds from banks, dealers said.

At 1148 IST, the three-day call rate was 4.95%, down from 5.10% for one-day loans Thursday. The weighted average call rate was 5.13%, higher than 5.09% Thursday. Trade volume in the call money market was INR 117.67 billion. Dealers expect the rate to be in the range of 4.60–5.15% during the day on the back of ample surplus liquidity in the banking system. The weighted average call rate is expected to be between 5.05% and 5.15%.

At 1148 IST, the three-day tri-party repo rate was 4.94% Friday, marginally lower than Thursday's close of 5.00% for one-day loans. The weighted average rate was 4.93%, higher than 4.78% Thursday. The volume in the tri-party repo market was INR 3.10 trillion. During the day, the weighted average tri-party repo rate is likely to be in the range of 4.80-5.00%.

As per the latest figures, the net liquidity absorbed by the RBI was INR 4.09 trillion Thursday, lower than INR 5.21 trillion Wednesday. The amount is an indication of the liquidity surplus in the banking system. Surplus liquidity has fallen below INR 5 trillion for the first time since Saturday.

Banks have increased their cash balances parked with the RBI, leading to the sharp downturn in liquidity, dealers said. As the new reporting fortnight began Thursday, banks increased their cash balances with the RBI to INR 8.39 trillion, up from INR 7.46 trillion the previous day. The average daily cash requirement for the fortnight ending Apr. 30 for the banking system is INR 8.07 trillion.

"The surplus liquidity fell maybe because banks have started positioning for the payment for outflow of goods and services tax," a dealer at a public-sector bank said. "As such, there was no outflow that happened yesterday (Thursday), so maybe banks have started preparing for the outflow earlier than expected."

Inflows of INR 527 billion are scheduled for Friday, flooding the banking system with more liquidity. The maturity and coupon payment of the 6.99%, 2026 gilt makes up around INR 360 billion of the total. The RBI's INR-2-trillion, seven-day VRRR auction conducted last week matured Friday, which banks rolled over despite goods and services tax outflows of INR 1.5 trillion-INR 1.8 trillion expected early next week. (Durgesh Nandan)

End

US$1 = INR 92.9250

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Akul Nishant Akhoury

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2026. All rights reserved.