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RBI Injects Lakhs to Ease Banking System Strain
17 Mar
Summary
- RBI injected ₹48,014 crore into the banking system.
- Liquidity fell sharply due to advance tax payments.
- Further liquidity drain expected from GST payments.
The Reserve Bank of India (RBI) injected ₹48,014 crore of transient liquidity into the banking system on Tuesday through a seven-day variable rate repo auction. This injection occurred at a cut-off and weighted average rate of 5.26 percent.
The amount infused was considerably less than the notified ₹1.50 lakh crore, despite a sharp decline in surplus liquidity. This reduction in funds is largely attributed to advance tax payments made by corporations.
Liquidity in the banking system is currently estimated at a surplus of approximately ₹75,483.63 crore as of March 16, a significant decrease from ₹2.08 lakh crore recorded on March 15 before the advance tax outflows.
The situation is expected to tighten further as banks face additional outflows for Goods and Services Tax (GST) payments later this week. The RBI has been actively infusing liquidity since January 2026, adding ₹3.50 lakh crore through open market operations to manage overnight interest rates, keeping them below the repo rate.
