Lenders are seeking permission to park some of the money they have with the Reserve Bank of India for short-term financial stress, the people said, asking not to be identified because the discussions are private. Meetings have taken place between the RBI and several banks in the last two weeks, they said.
The talks underscore the challenges Indian lenders face in sustaining growing demand for credit in the world’s fastest-growing major economy as households use savings to buy stocks, depleting banks’ traditional source of funding. Allowing a larger share of the so-called cash-reserve ratio balances to count towards the liquidity coverage ratio requirements will free up more resources for banks and reduce borrowing costs.
Lenders also asked the RBI to consider early implementation of revised liquidity rules that would allow them to hold fewer government bonds, something that would also free up more money for lending, the people said. These new rules are intended to come into effect from April 1.
They also want the RBI to reduce the minimum maturity of infrastructure bonds from seven years, allowing them to raise more money through these instruments, the people added.
An RBI spokesperson did not respond to an email seeking comment.
According to the latest central bank data, bank deposits rose 10.6% on January 15 from a year earlier, while credit growth lagged at 13.1%. The yield on three-month certificates of deposit used by banks to raise short-term funds stood at 6.98% on Wednesday, much higher than the yield on government bonds of comparable maturity.
Published on February 4, 2026
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