India’s banking sector is grappling with a severe liquidity deficit, reaching a near five-year high as the Reserve Bank of India (RBI) reported a shortfall of ₹1.74 lakh crore. This liquidity strain has been primarily driven by significant Goods and Services Tax (GST) dues and recent bond auctions. Additional pressures have arisen from earlier withdrawals through the Incremental Cash Reserve Ratio (I-CRR), which reduced available funds by approximately ₹1 lakh crore.
Read More : India’s Banking Sector Grapples with Worst Liquidity Crisis in Half a Decade