The Reserve Bank of India’s April 2025 Bulletin includes a timely review of the Standing Deposit Facility, three years since its introduction. While presented as a technical appraisal, the article also addresses mounting concerns over liquidity management voiced at the highest levels of the central bank.In February, Governor Sanjay Malhotra remarked that banks were increasingly avoiding the call money market, choosing instead to park funds passively with the RBI through the SDF. This trend, he suggested, was weakening the depth and signalling power of the overnight market.
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