The Maha Kumbh astonished the country and the world with its grandeur but emptied the bank accounts. It will sound a bit strange but crores of people withdrew a lot of money from the banks to go to the Maha Kumbh. The situation is such that now the banks do not even have money to distribute loans. To improve this condition of the banks, RBI is now going to take a big step. It was revealed in a report that RBI will have to do something soon to increase capital liquidity in the banking sector.

According to a report by the State Bank of India (SBI), RBI will have to cut the cash reserve ratio (CRR) to infuse capital into banks. If there is no change in the ownership of government securities (G-secs) in the financial year 2025-26 (FY26), the gap in open market operations (OMO) could be around Rs 1.7 lakh crore. This means that additional liquidity measures are needed.

Lowest capital in 10 years

According to the report, the liquidity crisis in the Indian banking system is the worst in more than a decade. The liquidity of the system fell from a balance of Rs 1.35 lakh crore in November to a deficit of Rs 0.65 lakh crore in December. This deficit increased to Rs 2.07 lakh crore in January and a deficit of Rs 1.59 lakh crore in February.

Mahakumbh increased the trouble.

The SBI report said that due to a big religious event like Mahakumbh, there has been a shortage of cash in banks. During Mahakumbh, retail depositors withdrew a large amount of money from banks and spent it in Mahakumbh. During this period, the ratio of deposits has been much less than withdrawals, and banks have been continuously facing cash shortages. The result is that a large part of the withdrawn currency has not yet returned to the banking system.

RBI will have to take action
If we believe this report of the country's largest bank SBI, then now RBI will have to reduce CRR to overcome liquidity-related problems. In the MPC meeting of February also, RBI had reduced CRR by 0.50 percent, which brought capital of Rs 1.10 lakh crore in the banking system. However, this amount is insufficient to increase liquidity and soon CRR will have to be reduced further so that banks can use the money kept in their buffer.

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