Reserve Bank of India tells government to auction surplus funds
Published February 21st, 2008
The Reserve Bank of India (RBI) has suggested that the government should auction surplus funds in the system rather than parking it with RBI at the end of the financial year.
According to sources close to the development, the suggestion follows the liquidity crunch in the market, which arises before March-end every year.
Even if the funds are available in the credit account of RBI, it has to infuse liquidity at a higher rate of 7.75 per cent, which pushes up other rates as well in the market.
Related Articles
