RBI to infuse Rs 1 trn into banking system via special auctions in March

Higher tax outgo will fuel cash demand by banks, corporate sectors

The Reserve Bank of India (RBI) will infuse up to Rs 1 trillion into the banking system through special auctions this month to manage additional demand for liquidity as activities of banks and corporate entities pick pace before the close of the financial year.

The current financial year (2017-18) ends on March 31.

Treasury executives said liquidity in the system has been under pressure, with supply falling short of demand on some days. The RBI has maintained its stance to keep liquidity close to neutral.

The announcement to conduct special auctions to inject additional resources into the system to tackle