RBI moves to soak up liquidity generated by cash crisis

Old 500-rupee notes being counted

The decision to scrap India's two largest-denomination banknotes at midnight on November 9 led to a surge in liquidity that the Reserve Bank of India (RBI) is now mopping up.

The central bank imposed an "incremental cash reserve ratio (CRR)" on November 26, designed to siphon off the additional liquidity created by deposits of banknotes.

"The magnitude of surplus liquidity available with the banking system is expected to increase further in the fortnights ahead," the RBI said in a statement.

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@centralbanking.com or view our subscription options here: http://subscriptions.centralbanking.com/subscribe

You are currently unable to copy this content. Please contact info@centralbanking.com to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Central Banking? View our subscription options

If you already have an account, please sign in here.

You need to sign in to use this feature. If you don’t have a Central Banking account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account