MUMBAI (India CSR): The Reserve Bank of India (RBI) on Wednesday reported net liquidity absorption of Rs. 1,83,26,34,20,000 (Rs. 1.83 lakh crore), reflecting continued surplus liquidity conditions in the banking system. The absorption was mainly through the Standing Deposit Facility (SDF), while limited borrowing was observed under the Marginal Standing Facility (MSF).
Overnight and Term Segments Record Nil Volumes
According to the central bank’s release, activity in the overnight money market segment remained absent, with nil volumes across call money, triparty repo, market repo, and repo in corporate bonds. Similarly, the term segment also reported no transactions in notice money, term money, and repos.
Liquidity Adjustment Facility and RBI Windows
Under the RBI’s liquidity adjustment framework, banks borrowed Rs. 1,292,00,00,000 (Rs. 1,292 crore) under MSF at 5.75 per cent, while a significantly higher amount of Rs. 1,15,94,60,00,000 (Rs. 1,15,946 crore) was absorbed under SDF at 5.25 per cent.
The net liquidity absorbed from the day’s operations stood at Rs. 1,14,65,40,00,000 (Rs. 1,14,654 crore), highlighting surplus funds in the system.
Outstanding Operations
Outstanding liquidity operations showed that Rs. 75,78,10,00,000 (Rs. 75,781 crore) remained absorbed under a variable rate reverse repo, which was conducted on August 22, 2025, with a seven-day maturity, due on August 29, 2025, at a cutoff rate of 5.49 per cent.
Additionally, banks borrowed Rs. 470,00,00,000 (Rs. 470 crore) under MSF at 5.75 per cent and parked Rs. 4,25,20,00,000 (Rs. 4,252 crore) under SDF at 5.25 per cent from the operations of August 26.
The RBI also disclosed that Rs. 10,95,35,80,000 (Rs. 10,953.58 crore) was availed under the Standing Liquidity Facility (SLF). Including all operations, the net liquidity absorption stood at Rs. 1,83,26,34,20,000 (Rs. 1.83 lakh crore).
Reserve Position of Banks
Scheduled commercial banks maintained Rs. 9,92,58,95,90,000 (Rs. 9,92,589.59 crore) cash balances with the RBI as of August 27, well above the average daily cash reserve requirement of Rs. 9,63,21,00,00,000 (Rs. 9,63,210 crore) for the fortnight ending September 5, 2025.
Government Balances and Durable Liquidity
The Government of India’s surplus cash balance for auction was nil as on August 26, 2025. RBI estimates showed net durable liquidity surplus at Rs. 4,98,05,50,00,000 (Rs. 4,98,055 crore) as of August 8, 2025, confirming abundant liquidity in the financial system.
Liquidity Management in Focus
The numbers highlight the RBI’s ongoing liquidity management strategy. While the absence of call money and repo volumes indicates subdued interbank demand, the high absorption through the SDF underscores excess systemic liquidity ahead of upcoming government borrowing programmes and the fortnightly reserve maintenance cycle.
(India CSR)
