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Banking system liquidity on the slide due to advance tax outflow

As of Monday, the banking system liquidity was at a surplus of Rs 4.95 trillion, as against Rs 6.13 trillion a week earlier, on the eve of the deadline for the third instalment of advance tax

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The liquidity overhang had figured in the discussions of the monetary policy committee (MPC), the minutes showed

Anup Roy Mumbai
The banking system liquidity has fallen substantially in recent weeks, but experts say that is largely because of advanced tax outflow and is not sudden activism on the part of the central bank even as it might have carefully started to drain the system without flustering the bond markets. 

As of Monday, the banking system liquidity was at a surplus of Rs 4.95 trillion, as against Rs 6.13 trillion a week earlier, on the eve of the deadline for the third instalment of advance tax. In both cases, however, the overall system liquidity was Rs 8.22 trillion. The overall system liquidity

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First Published: Dec 24 2020 | 6:10 AM IST

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