RBI News: March 15, 2023 was the last date for depositing advance tax. Corporates have deposited advance tax. But due to Corporate Advance Tax, there was a shortage of cash in the banking system. After which, to deal with the cash crunch, the country’s Central Bank Reserve Bank of India has infused Rs 1.1 lakh crore cash into the banking system. For the first time after April 2019, RBI has infused such a huge amount of cash.
According to statistics, RBI has put Rs 110,772 crore in cash in the banking system on March 16, 2023. Due to the shortage of cash in the banking system, there has been an increase in money market rates. The call money rate has reached 6.80 per cent, which is higher than the repo rate of 6.50 per cent and the MSF rate of 6.75 per cent. MSF is the upper band of the interest rate. The increase in call rate indicates that it is expensive for banks to take loans.
Till March 15, RBI had withdrawn cash of Rs 51,925 crore every day from the banking system. Banks had excess cash. But the advance tax was deposited by March 15, due to which the banks faced a cash crunch. On March 16, 2023, there was a cash shortage of Rs 1.1 lakh crore. GST is to be paid by March 20, so it had become very important for RBI to deposit cash. On March 10 also, banks raised Rs 82,650 crore in the variable rate repo auction conducted by RBI.
In April 2022, additional cash of Rs 7.2 lakh crore was available in the banking system, which has come down to Rs 1.6 lakh crore in December-January. To curb inflation after May 2022, RBI is continuously absorbing extra cash from the banking system. Last year also there was a cash crunch in front of the banks.
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