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4usnews:Reserve Bank of India (RBI) on Tuesday reiterated measures to alleviate the liquidity and borrowing by banks has exceeded Rs 1 lakh crore for the second day, indicating that tight.
The central bank opened a second plant control liquidity (LAF) window, and additional liquidity support to the LAN to 1 per cent of net demand and time liabilities. Both of these measures will be available until December 16.
RBI said the measures were announced in order to provide liquidity comfort arising from frictional pressure liquidity. ”
The present liquidity crisis reflects the central governmentâ € ™ with high cash balances, increased investment banks in government bonds, the opening of Electricity follow a public Rs 7,500 crore and friction demand, the banker said.
RBI said in a news release Tuesday that the banks will not be punished for any deficits in the statutory liquidity between November 9 and December 16. Banks should invest 25 percent of their net demand and time liabilities ingovernment bonds and other securities approved under the SLR. This “special and temporary measures, the central bank said.
Interbank call money rates that were in the 7.40-7.50 per cent â € “higher than the repo rate is 6.25 per cent â €” cooled to close at 6.7 percent after RBIâ measures € ™ S. Netborrowing by banks, which was Rs 1,10 crore rupees from RBIâ € ™ S first tender repo on Tuesday, went down to Rs 6,825 crore in the second LAN.
“Liquidity is tight at the moment,” said Deepak Parekh, chairman HDFC. “It will weaken as the money is coming into the system. Tightness only for a while,” he added.
However, bankers say the weather reflects the disparity in liquidity over cash crisis. “If you look at investment banks in government bonds exceeds the minimum requirements of SLR, it will not show there is a shortage of liquidity in the system, â € ™ â € ™ said a senior official in the large state-owned banks in Mumbai.
“The true measure of liquidity borrowing in the call money market. Bet there is not broke, as they have grown to double digits on October 29!
Possible reason for RBI introduction of these measures to avoid recurrence of a sudden shortage of funds in the last week of October, highlights Coal India Ltd the initial sale of shares. Coal India, which was aimed at raising record Rs 15,500 crore, has received more than 15 times the amount.
October 29, as overnight rates shot up 12 percent and bank loans in accordance with the LAN crossed Rs 1 crore, RBI provided similar assistance.
October 29 measures were originally to 2 November but were postponed to November 7. Following these measures, the overnight rate moderated to almost the top end of the corridor of interest rate, but banksâ € ™borrowing from the repo tender was sharply reduced.
According to RBI, although liquidity in accordance with its anti-inflation stance, the excessive deficit could be devastating for financial markets and credit growth in the banking system.
“In order for economic activity is not impaired liquidity, lack of liquidity must be within a reasonable time”, RBI said in its mid-term review of monetary policy on November 2.
The central government also announced a repurchase of securities chosen to infuse liquidity in banks. RBI conducted open market operations, through which he bought three bonds and pumped Rs 8,352 crore to the banks.....
