Potential liquidity available in system: RBI

November 22, 2010 05:53 pm | Updated November 17, 2021 05:32 am IST - Mumbai

Deputy Governor of Reserve Bank of India Shyamala Gopinath. File photo:Vipin Chandran

Deputy Governor of Reserve Bank of India Shyamala Gopinath. File photo:Vipin Chandran

In the wake of recent concerns over a liquidity crunch in the system, Reserve Bank of India Deputy Governor, Shyamala Gopinath, on Monday said there is a “potential liquidity” available in the system.

The Central Bank’s recent liquidity infusion moves like the second LAF (Liquidity Adjustment Facility) and the second one per cent below SLR (Statutory Liquidity Ratio) have given confidence to market participants, she said.

“That has given a lot of confidence to them...there is so much more potential liquidity in the system,” Ms. Gopinath said, speaking on the sidelines of the launch of interbank mobile payment service here.

When pointed out that banks are drawing over Rs. 1 trillion everyday for around a month from the Reserve Bank as compared to the usual Rs. 700 billion and are not using the SLR facility, she said, “If they have not drawn from the one per cent SLR as you say, it means that there is potential liquidity available in the system for the banks to draw if they require it.”

Ms. Gopinath further said that the RBI has been monitoring the liquidity situation.

RBI Deputy Governor, Subir Gokarn, had recently indicated the Central bank is concerned over the excess deficit in liquidity, which has crossed the Rs. 50,000 crore comfort zone which it has set for itself.

0 / 0
Sign in to unlock member-only benefits!
  • Access 10 free stories every month
  • Save stories to read later
  • Access to comment on every story
  • Sign-up/manage your newsletter subscriptions with a single click
  • Get notified by email for early access to discounts & offers on our products
Sign in

Comments

Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.