07 march 2007

rbi imposes cap on inter-bank liabilities from april 1
mumbai: the reserve bank of india (rbi) has put caps on inter-bank liabilities from april 1, 2007, as smaller banks have been borrowing heavily to tide over tight liquidity.

the rbi has also asked banks with high concentration of wholesale deposits to contain the liquidity risk arising out of excessive dependence on such deposits.

bulk deposits constituted nearly 20 per cent of term deposits of the banking sector, banking sources said.

the inter-bank liabilities were capped at 200 per cent of net worth on march 31, 2006.