On Wednesday, banks borrowed the largest amount from the Reserve Bank of India?s (RBI) special repo window to cope up with the liquidity shortage in the system. They borrowed a sum of Rs 70,175 crore.
Call rates ended at 5.05-5.10% as against 5.25-5.40% on Tuesday. At the same time, three-month certificate of deposit were quoted at 6.20-6.30% compared with 6.25-6.35% on Tuesday, while commercial papers were quoted at 6.50-6.80% unchanged from Tuesday.
One-year CDs were dealt at 6.70-6.80%, as against 6.75-6.85% on Tuesday.
The yield on the 10-year benchmark paper, 7.80% bond maturing 2020, ended at 7.5979% compared with 7.5720% on Tuesday.
Funds close to Rs 30,000 crore has moved out of the banking system towards the first installment of corporate advance tax. Telecommunications companies also paid the government Rs 67,700 crore for 3G spectrum last week out of which banks have contributed Rs 45,000 crore.
In a bid to ensure enough liquidity in the banking system, mainly arising from payments to be made for 3G licenses, the central bank had allowed banks to maintain a lower statutory liquidity ratio for banks, by 0.50%, for a short period till July 2, 2010.
