The Reserve Bank of India (RBI) may meet senior officials from some banks on November 2 and November 3 to talk about the prevailing liquidity conditions in the banking system, seven treasury officials privy to the development told news agency Reuters on Thursday. 


A treasury official from a PSB said, "The central bank will meet officials at the executive director and chief general manager levels, and a discussion on the liquidity picture is on the agenda, though a formal invite has not yet come.” 


RBI Governor Shaktikanta Das, in his last MPC meeting, urged the lenders to not park them at the standing deposit facility (SDF) but lend in the inter-bank market. The proposed meeting with state-run, foreign, and private banks comes less than a month after that MPC meeting.


According to Reuters, banking system liquidity is in a deficit of more than Rs 1 trillion as of October 25.


"It is imperative that banks assess their actual liquidity requirements over the reserve maintenance cycle and bid accordingly in the auctions under main 14-day VRRR (variable rate reverse repo) operations," Das said. "It is desirable that banks having surplus funds explore lending opportunities in the inter-bank call market rather than passively parking funds in the SDF at relatively less attractive rates," he added. 


Greater volume of call money transactions would not only help in deepening the inter-bank money market but also lower the recourse of deficit banks to the marginal standing facility, Das said. 


Market participants are also eagerly awaiting hints on when the central bank would conduct an open market sale of debt as announced in the October monetary policy meeting. The central bank will also commence bond sale, once government spending picks up and the durable liquidity surplus improves, two sources aware of the development had told the news agency last week. 


ALSO READ | Stock Market Crash: Sensex Dives 901 Points; Nifty Closes Around 18,850. M&M Sinks 4 Per Cent