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Informist, Wednesday, Oct. 7, 2026

 

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--RBI Malhotra: Daily avg liquidity surplus INR 5.9 tln since last policy 
--RBI Malhotra: RBI measures helped absorb excess system liquidity 
--RBI Malhotra: Weighted avg call rate traded in lower half of policy corridor
--RBI Malhotra: G-sec ylds hardening from mid-Aug on geopolitical tension
--RBI Malhotra: G-sec ylds hardening from mid-Aug on high oil prices
--RBI Malhotra: Credit growth stays robust
--RBI Malhotra: G-sec ylds hardening from mid-Aug on higher US ylds
--RBI Malhotra: Will use apt mix of liquidity mgmt tools 
--RBI Malhotra: Will use apt mix of liquidity tools to align WACR with repo 
--RBI Malhotra: System level parameters of NBFCs sound
--RBI Malhotra: System level parameters of NBFCs sound
--RBI Malhotra: Depositories to have info on deposit accts in consol statement
--RBI Malhotra: New NBFC, depository measures to be implemented by year-end

 

MUMBAI – The Reserve Bank of India has taken measures to absorb excess liquidity from the banking system and will continue to use an appropriate mix of liquidity management tools and strive to align the weighted average call rate with the policy repo rate, RBI Governor Sanjay Malhotra said on Wednesday. System liquidity increased substantially during August and September on account of the measures undertaken to attract capital inflows. The average daily systemic liquidity stood at a surplus of INR 5.9 trillion since the last Monetary Policy Committee meeting in August, he said.

 

"In view of the surplus liquidity conditions, the weighted average call rate largely traded in the lower half of the policy corridor in the recent period," the RBI governor said. "...going forward, the Reserve Bank will use an appropriate mix of liquidity management tools and strive to align the weighted average call rate with the policy repo rate." The weighted average call rate on average traded 14 basis points below the policy repo rate since August policy.

 

In the wake of surplus liquidity in the banking system, the weighted average call rate was largely in the lower end of the Liquidity Adjustment Facility corridor in recent times. However, measures taken by the central bank, paired with the quarterly advance tax outflows, moderated the surplus liquidity in September, the governor said. The RBI's net liquidity absorbed--a proxy for the banking system liquidity surplus--was INR 4.99 trillion Tuesday, down from INR 5.30 trillion Monday.

 

He further mentioned the short-term money market rates, especially rates of commercial paper and certificates of deposit, moderated significantly in Aug-Sept, whereas government bond yields hardened amid renewed geopolitical tensions in West Asia, a rise in global bond yields, and an increase in crude oil prices. The central bank sold INR 1 trillion worth of gilts through open-market operations auctions in September, which also weighed on bond prices. 

 

Transmission in the credit market reflected dissimilar movements in deposit and lending rates during Jul-Aug. Nevertheless, credit growth remains robust and broad-based across sectors, he said. During Jul-Aug, the weighted average lending rate of scheduled commercial banks on fresh rupee loans rose by 8 bps, while it remained unchanged on outstanding loans, according to the RBI release. In contrast, the weighted average domestic term deposit rate eased by 28 bps for fresh deposits and 2 bps for outstanding deposits, due to a decline in bulk deposit rates amid a surge in liquidity from mobilisation of foreign currency non-resident (banks) deposits.  End

 

US$1 = INR 96.57

 

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

 

Reported by Janwee Prajapati

Edited by Deepshikha Bhardwaj

 

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