As of August 24, scheduled commercial banks maintained Rs. 9,94,419.82 crore as cash balances with the RBI.
MUMBAI (India CSR): The Reserve Bank of India (RBI) on Sunday, August 24, continued its tight liquidity management, with data showing a massive net absorption of funds from the banking system. According to the central bank’s latest release on Money Market Operations, the RBI absorbed a net liquidity of Rs. 1,64,115.90 crore from the financial system, underscoring the prevailing surplus liquidity conditions.
No Transactions in Call Money or Repo Segments
The report revealed that there were no transactions recorded in the overnight money market segment, including the call money, triparty repo, market repo, and repo in corporate bonds. Similarly, the term money and repo markets remained inactive. Market experts noted that the absence of activity reflects the significant liquidity surplus, with banks preferring to park funds with the RBI through the Standing Deposit Facility (SDF) instead of lending in the interbank market.
Heavy Reliance on SDF Facility
On August 24, scheduled commercial banks parked a record Rs. 92,624 crore with the RBI under the Standing Deposit Facility (SDF) at the fixed rate of 5.25%. At the same time, borrowings under the Marginal Standing Facility (MSF) stood at Rs. 533 crore at the rate of 5.75%. The sharp contrast highlights the system-wide liquidity surplus, where banks are flush with funds but lack adequate lending opportunities.
Outstanding Reverse Repo Adds to Absorption
The outstanding operations further amplified liquidity absorption. A large reverse repo auction worth Rs. 75,781 crore (maturing August 29) was conducted earlier at a cut-off rate of 5.49%, adding to the RBI’s liquidity absorption efforts. With outstanding SDF deposits of Rs. 8,900 crore (from earlier auctions) and MSF borrowings at Rs. 1,671 crore, the liquidity picture clearly reflects a stronger bias toward absorption than injection.
Banks Maintain Higher Cash Balances with RBI
As of August 24, scheduled commercial banks maintained Rs. 9,94,419.82 crore as cash balances with the RBI. This is above the average daily cash reserve requirement of Rs. 9,63,210 crore for the fortnight ending September 5, 2025. Analysts interpret this as a sign that banks are meeting reserve requirements comfortably, further strengthening the liquidity surplus narrative.
Net Durable Liquidity Shows Strong Surplus
The RBI also reported that net durable liquidity—a measure of system-wide surplus or deficit—stood at Rs. 4,98,055 crore as of August 8, 2025. This large surplus gives the central bank significant room to maneuver in managing money market rates within the policy corridor.
Policy Implications
The large absorption indicates that liquidity conditions remain well above neutral, even as the RBI continues to maintain its policy repo rate at 6.50%. By actively absorbing excess funds, the central bank seeks to ensure that short-term money market rates do not fall below the policy corridor, which could otherwise weaken monetary transmission.
Economists suggest that the surplus may be partly seasonal, driven by government spending patterns and high deposit growth, while credit demand remains uneven. The liquidity picture will be closely monitored as the fortnightly cash reserve cycle progresses and ahead of expected government bond issuances.
RBI Money Market Snapshot (₹ crore, %)
| Category | Amount (₹ crore) | Rate (%) |
|---|---|---|
| SDF (Standing Deposit Facility) | 92,624 | 5.25 |
| MSF (Marginal Standing Facility) | 533 | 5.75 |
| Reverse Repo (Outstanding) | 75,781 | 5.49 |
| Cash Balances with RBI | 9,94,420 | – |
| CRR Requirement (Fortnight) | 9,63,210 | – |
| Net Liquidity Absorption (Daily) | -92,091 | – |
| Net Liquidity Absorption (Total) | -1,64,116 | – |
| Net Durable Liquidity (as of Aug 8) | 4,98,055 | – |
(India CSR)
