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Informist, Monday, Apr. 20, 2026

By Durgesh Nandan and Shumaila Firoz

MUMBAI – The one-day interbank call money rate ended below the Reserve Bank of India's repo rate of 5.25% on Monday due to ample surplus liquidity, but above the Standing Deposit Facility rate due to late demand for funds from some banks to meet their requirements, dealers said. The rates in the overnight market were largely unaffected despite goods and services tax outflows of INR 1.8 trillion – INR 2.00 trillion scheduled from Monday to Wednesday, as less than 20% of the total outflow took place Monday, dealers said. 

The one-day call money rate ended at 5.13% Monday, sharply higher than 4.50% for two-day loans Saturday. The weighted average rate was 5.11%, also sharply higher than 4.50% for two-day loans Saturday. The volume in the call money market was INR 213.84 billion, sharply higher than INR 6.25 billion in the previous session. The rates and volume in the overnight market were low on Saturday due to low participation and sluggish demand for funds, dealers said.

"We expect the rates to rise by 5 bps (basis points) in both the markets (call-money and tri-party repo market)," a dealer at a state-owned bank said. "Tomorrow (Tuesday), around 90 thousand crore (INR 900 billion) outflow is expected for GST (goods and services tax), then we could expect TREPs (tri-party repo market rate) to cross SDF rate and call (rate) will be around 5.10%."

The one-day tri-party repo rate ended at 4.95% Monday, higher than Saturday's close of 4.75% for two-day loans. The weighted average rate was 4.95%, also higher than 4.77% Saturday. The volume in the tri-party repo market was INR 4.67 trillion. The tri-party repo market rate was below the SDF rate as mutual funds are sitting on a lot of cash at the beginning of financial year 2026-27 (Apr-Mar) and there is no demand for funds, dealers said. 

"It is possible that, due to low rates in TREPs (tri-party repo market), banks are doing arbitrage trading," a dealer at another public sector bank said. "As one can see that after keeping 2 lakh crore (INR 2 trillion) in VRRR (variable rate reverse repo) auction, they have put around the same amount with the RBI in SDF too."

According to latest figures, the net liquidity absorbed by the RBI was INR 4.28 trillion Sunday, up from INR 4.25 trillion Saturday but down from INR 4.42 trillion on Friday. Even after the tax payments, surplus liquidity with banks is likely to be in the range of INR 2.0 trillion – INR 3.0 trillion, which would still be comfortable, dealers said.

".....after this week, government month-end spending is likely to hit the banks, so there will be no pressure on systemic liquidity till the end of May," a dealer at another public sector bank said.

OUTLOOK

On Tuesday, the one-day call money rate is likely to open at 5.10-5.15%. Dealers expect the call rate around 4.80–5.15% 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 and low demand for funds despite GST payments. While rates could inch higher on Tuesday due to the scheduled outflow, it would not have any significant impact, dealers said. Inflow for coupon on state bonds of INR 4.26 billion is scheduled for Tuesday. More than 50% of the payment for goods and services tax outflows will take place Tuesday, dealers said. 

CALL RATE

5.13%--Monday close for one-day loans

5.15%--Monday open for one-day loans

4.50%--Saturday close for two-day loans

BENCHMARK MIBOR (in %)  

Mumbai Interbank Outright Rates compiled by Financial Benchmarks India:

India Call: Sharply down on low demand for funds due to surplus liquidity

MUMBAI - The one-day interbank call money rate was sharply lower from Monday's opening level after primary dealerships met their demand for funds in early trade, dealers said. However, the tri-party repo market rate was up on demand for funds from banks due to outflows for payment of goods and services tax, they said.

At 1445 IST, the one-day call rate was at 4.65%, down from Monday's opening of 5.15%, but higher from 4.50% for two-day loans Saturday. The weighted average call rate was 5.11%, also sharply higher than 4.50% Saturday. Trade volume in the call money market was INR 165.45 billion.

At the same time, the one-day tri-party repo rate was 4.93%, similar to Monday's opening of 4.90% and up from Saturday's close of 4.75% for two-day loans. The weighted average rate was 4.95%, also higher than 4.77% Saturday. The volume in the tri-party repo market was INR 4.16 trillion.

The tri-party repo market is continuously trading below the SDF rate as banks were unwilling to borrow above that rate, dealers said. Mutual funds have a surplus cash, having received large inflows at the beginning of the financial year 2026-27 (Apr-Mar), and are also willing to lend cheaply. Banks are likely to shift to their own cash surplus parked in the SDF window at 5.00% if tri-party repo rates go up beyond 5.00%, they said. 

"Rates in the overnight market will not be much higher today as a large part of trade has already happened (by 1300 IST)," a dealer at a large private-sector bank said. "...the outflow (goods and services tax outflow) will not impact the rates in the overnight market significantly."

According to the latest figures, the net liquidity absorbed by the RBI was INR 4.28 trillion Sunday, up from INR 4.25 trillion Saturday but down from INR 4.42 trillion Friday. GST outflows are expected to total INR 1.8 trillion to INR 2.0 trillion on a gross basis over the next few days, starting Monday. Even after the tax payments, surplus liquidity with banks is likely to be in the range of INR 2.0 trillion – INR 3.0 trillion, which would still be a comfortable position, dealers said.

"Banks will not be worried after this outflow as (surplus) liquidity will be around 2.5 lakh crore (INR 2.5 trillion) to 3 lakh crore (INR 3 trillion) and they have kept more than 2 lakh crore (INR 2 trillion) with the RBI in SDF," a dealer at public-sector bank said. (Durgesh Nandan)

India Call: Up on early demand from PDs, NBFCs despite surplus liquidity

MUMBAI – The one-day interbank call money rate was up Monday due to demand for funds from primary dealerships and some non-banking financial companies, dealers said. The tri-party repo market rate also up on increased demand for funds from banks due to outflows for payment of goods and services tax, they said.

However, the call money rate was below the Reserve Bank of India's repo rate of 5.25% due to ample liquidity in the banking system. The tri-party repo rate was below the RBI's Standing Deposit Facility rate of 5.00% due to surplus liquidity with mutual funds, dealers said.

At 0951 IST, the one-day call rate was 5.15%, sharply higher from 4.50% for two-day loans Saturday. The weighted average call rate was 5.15%, also sharply higher than 4.50% Saturday. Trade volume in the call money market was INR 68.21 billion. Dealers expect the rate to be in a range of 4.80–5.20% during the day due to demand for funds from some banks. The weighted average call rate is expected to be between 5.05% and 5.15%.

The one-day tri-party repo rate was 4.97%, higher than Saturday's close of 4.75% for two-day loans. The weighted average rate was 4.95%, also higher than 4.77% Saturday. The volume in the tri-party repo market was INR 1.82 trillion. During the day, the weighted average tri-party repo rate is likely to be in a range of 4.80-5.10%. Rates in the overnight market were down Saturday due to low participation and weak demand for funds.

"Tri-party repo rate will cross SDF rate during the day, but it will cool down later in the day due to comfortable (surplus) liquidity in the banking system, even though there is a GST (goods and services tax) outflow of 1.8 lakh crore (INR 1.8 trillion)- 2 lakh crore (INR 2 trillion)," a dealer at a public sector bank said. Dealers see outflows for GST payments scheduled from Monday to Wednesday.  

As per latest figures, the net liquidity absorbed by the RBI was INR 4.42 trillion Friday, down from INR 4.09 trillion Thursday. Surplus liquidity rose slightly on Friday due to inflows of INR 527 billion for redemptions and coupon payments. Inflows of INR 100.3 billion from redemptions and coupons on state bonds are scheduled Monday. (Durgesh Nandan)

End

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

Edited by Avishek Dutta

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