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The bank borrowing at Reserve Bank of India’s Liquidity Adjustment Facility (LAF) rose sharply to Rs 1,35,000 crore in morning on the last day of payment of advance tax and reporting fortnight.
Bank treasury executives said there is also pressure on liquidity due to surge in financial year-end activity.
According to RBI data 48 banks tapped window for short term money. Banks had borrowed Rs 92,500 crore from LAF.
While pressure may subside partly, the liquidity deficit will remain. It may nudge RBI to cut the Cash Reserve Ratio by 25 basis points in mid quarter review slated on March 19 to release funds, dealers said.
