RBI's Temporary Liquidity Support to Banks Expected to End After March

The Reserve Bank of India's additional liquidity support to lenders, aimed at easing funding pressures and lowering short-term borrowing rates, is expected to wind down after March. This temporary measure pushed overnight rates below the repo rate amid a rising liquidity surplus exceeding 1% of deposits. Bankers view the move as a tactical response to recent funding stress, with the RBI likely to absorb excess cash and revert to its standard liquidity framework thereafter.