The cash crunch prevalent in India for some time hit a new high on 22 December 2010 with banks borrowing a little over Rs 1.7 lakh crore from the Reseve Bank of India (RBI) through the repo window. The borrowings on 22 December marked an all-time high borrowing figure from the repo facility of the central bank. Banks borrow from RBI’s repo facility only when there is a severe cash crunch. The rates in the call money market, where banks borrow from and lend to each other on an overnight basis went up to a high of 7.02%. On 22 December itself the RBI bought back government securities worth around Rs 8000 crore, and in the process infused this amount into the banking system.
Banks Borrowed Record Amount through RBI’s Repo Facility
By Jagranjosh
Mar 18, 2011, 11:32 IST
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