Tight liquidity in the money market has forced banks to offer higher rates on bulk deposits and raise as much as Rs 52,725 crore from the Reserve Bank of India.
Banks on Monday offered as much as 7.05% for one-year bulk deposits that was being offered by NTPC and NMDC. About a month ago, banks were raising one-year certificate of deposits in the range of 6.25-6.50%. Most bankers feel that interest rates may go up marginally in the coming weeks since RBI has raised signalling rates and they do not expect liquidity to ease before the end of this month.
Given the tightness, RBI has extended until July 16 the special liquidity facility which expired on July 2. This facility allows banks to borrow from RBI by offering as collateral bonds that are part of the bank’s statutory liquidity ratio (SLR) requirement.
The system is witnessing tight conditions for a month now largely because telecom companies paid a total of Rs 1.06 lakh crore to the government as payments to obtain spectrum for third general mobile telephony and broadband wireless access. Further, another Rs 30,000 crore moved out of the system by mid June as advance tax payment. Money, which now lies with RBI, will come into the system only in the form of government spending.
Bankers feel that tight liquidity conditions peaked last week when banks borrowed as much as Rs 80,000 crore from RBI under the repo auction, where it charges 5.50% for overnight money.
+1.jpg)
0 comments
Post a Comment