Banking system's liquidity surplus stands at ₹1.42 trn

The RBI's decision to inject liquidity comes despite the banking system's net liquidity flipping to surplus mode over the past four days — marking a turnaround after four months of deficit.

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The central bank plans to purchase ₹80,000 crore worth of government securities through four tranches of ₹20,000 crore each, scheduled for April 3, April 8, April 22, and April 29.

"The market wasn't expecting such aggressive OMO from the RBI. They (the RBI) could have allowed the deficit to run and waited for government spending to pick up. Instead, the immediate announcement clearly signals their intent to inject long-term liquidity," said Alok Singh, group head of treasury at CSB Bank.

The banking system's net liquidity surplus stood at ₹1.42 trillion as of Tuesday, according to RBI data.