RBI Absorbs Net Liquidity of Over ₹1.54 Lakh Crore in Latest Money Market Operations
The Reserve Bank of India reported net liquidity absorption of ₹1,54,895.13 crore from the banking system for operations through November 8, 2026. On November 8 alone, banks parked ₹1,50,425 crore with the central bank under the Standing Deposit Facility at a rate of 5.25 percent. Meanwhile, commercial banks borrowed ₹3,237 crore through the Marginal Standing Facility at 5.75 percent, leading to a daily net liquidity absorption of ₹1,47,188 crore. The central bank also noted that commercial banks maintained cash balances of ₹8,45,958.05 crore on November 8, exceeding their average daily reserve requirement of ₹8,16,655 crore for the fortnight ending November 15, 2026. These daily figures show how much surplus cash commercial banks choose to park with or borrow from the central bank. While these operations primarily affect short-term interbank interest rates, the overall availability of cash in the banking system influences the rates banks offer to depositors and charge on loans.
What was announced
The Reserve Bank of India published details of its money market and liquidity operations for November 8, 2026. Total net liquidity absorbed by the central bank reached ₹1,54,895.13 crore when combining daily and outstanding operations.
On November 8, commercial banks deposited ₹1,50,425 crore into the Standing Deposit Facility (SDF) at a cut-off rate of 5.25 percent. On the same day, banks drew ₹3,237 crore from the Marginal Standing Facility (MSF) at a rate of 5.75 percent. This resulted in a net liquidity absorption of ₹1,47,188 crore for that day.
In outstanding operations, the central bank held ₹18,133 crore in variable rate reverse repos from November 6 at an interest rate of 5.49 percent. Additional outstanding SDF deposits totaled ₹2,357 crore from November 7 and ₹524 crore from November 6. Banks also had ₹10,306.87 crore in Standing Liquidity Facility (SLF) drawn from the central bank.
Commercial banks held ₹8,45,958.05 crore in cash balances with the central bank on November 8. This sits above the required daily average of ₹8,16,655 crore set for the fortnight ending November 15, 2026.
What it means
Commercial banks currently hold extra cash that they deposit back with the central bank rather than lending out in the overnight market. The overnight uncollateralized money markets showed zero transaction volume across call money, triparty repo, and market repo on November 8.
Banks used the Standing Deposit Facility to earn 5.25 percent on their excess funds without needing to provide collateral. At the same time, specific lenders with short-term cash needs accessed funds through the Marginal Standing Facility at 5.75 percent. The central bank manages these tools to keep short-term interbank interest rates stable within its target range.
What the announcement does not tell us
The release does not explain why individual banks chose to borrow through the Marginal Standing Facility while the broader banking system held surplus liquidity. It does not state which specific financial institutions placed or withdrew money.
The document provides no commentary on monetary policy direction, future interest rate moves, or expected changes in banking liquidity. Finally, it lists the Government of India surplus cash balance as zero on November 6, but it does not clarify the reasons behind that balance.
How this was written
This analysis was written with AI from the official announcement below, using only facts that announcement states. The quoted wording is Reserve Bank of India Press Releases’s own. Always check the original before acting on anything here.
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