Mumbai: India’s finance ministry has called bankers into a meeting on Friday to discuss setting up a new facility to absorb surplus cash in the banking system, according to a letter sent to heads of lenders seen by Reuters on Thursday. The finance ministry wants to discuss implementing a new framework called a “standing deposit facility”, the letter said, that would drain surplus cash at a rate lower than the repo rate without the need for any collateral. The cash would be deposited with the Reserve Bank of India, and revives a proposal issued by the central bank in 2014 as another way to drain funds.
India finance ministry calls banks to discuss new facility to drain cash
Meeting to discuss new facility to absorb surplus cash