'Liquidity in comfort zone at the moment'

Liquidity in the banking system has returned to the Reserve Bank of India's stated comfort zone of one per cent of banks' net demand and time liabilities, deputy governor Subir Gokarn said on Monday.

As per the data collated until May 18, banks' deposits were at Rs 60,58,000, one per cent of which works out to Rs 60,000.

“At least, for the moment, liquidity is comfortable. That is, within our comfort zone,” Gokarn said on the sidelines of an event organised by Nomura.

A fall in daily borrowings through the RBI’s repo auction in recent sessions supports the case that systemic liquidity situation has improved.

In the fortnight to June 1, banks borrowed an average Rs 81,500 daily through the RBI’s repo auction, as against nearly Rs 1,00,000 in the fortnight to May 28.

Gokarn said the central bank had options available if the pressure on systemic liquidity surfaces again going forward. “But, we are watching the situation, and if we do see stress re-emerging, we clearly have the option of doing OMOs (open market operations).”