Call Money Rates Hit 7% as Banks Scramble for Year-End Liquidity

• Call money rates surged to 7% on Monday due to increased demand for liquidity from banks ahead of the fiscal year-end.
• The rise is attributed to balance sheet adjustments and regulatory requirements, tightening short-term funds.
• Dhanlaxmi Bank's Head of Treasury, Balasubramanian R, noted year-end pressure and a market holiday contributed to the spike.
• Despite a banking system liquidity surplus of Rs 1.14 lakh crore, demand for funds typically rises at year-end due to business withdrawals and RBI regulatory needs.
• The RBI injected Rs 50,001 crore into the banking system via a three-day variable rate repo auction to support liquidity.