India Banking System Surplus Liquidity Nears Rs 5 Lakh Crore

Banks in India had much more available money than usual at the end of August.

This extra money is called surplus liquidity.

It reached nearly Rs 5 lakh crore, or Rs 5.05 lakh crore.

One reason was that people and institutions brought foreign currency into banks through FCNR(B) deposits.

The banks exchanged this foreign currency with the Reserve Bank of India for rupees.

Government payments, including salaries and pensions, also put more money into the banking system.

The amount was the highest in more than four months.

A banking analyst said the liquidity could rise further as the special currency swaps near their closing date.