Foreign Currency Non-Resident (Bank) deposits are reported to be running significantly ahead of expectations, prompting calls for the Reserve Bank of India to drain surplus liquidity quickly. HSBC’s chief India economist, Pranjul Bhandari, says the central bank may need to remove up to Rs 6–7 lakh crore of excess liquidity within a fortnight.
According to the cited commentary, the liquidity drainage could be carried out through tools such as raising the cash reserve ratio (CRR) or selling US dollars. The outlets’ coverage centers on the same development—FCNR deposits surpassing estimates—and frames the policy implication around preventing unwanted buildup in liquidity. While the central bank’s exact actions are not reported as decided, the discussion highlights potential routes RBI could take to absorb liquidity and manage short-term financial conditions. Overall, the emphasis is on the scale and urgency of the liquidity adjustment following stronger-than-expected FCNR inflows.
