RBI action drains banks' surplus from ₹11T to ₹462B

Business Oct 28, 2026

India's banks are running low on spare cash after the Reserve Bank of India (RBI) took steps to protect the rupee from falling further.

Since early September, extra funds with banks have plunged from ₹11 trillion to just ₹462 billion by late October.

The RBI's move is aimed at keeping the currency stable, but it's making money tighter across the system.

RBI caps emergency cash at ₹1.5T

The RBI has also put a cap on how much emergency cash it will provide, sticking to a ₹1.5 trillion limit even when demand is high.

This squeeze is pushing up borrowing rates for banks and nonbank lenders alike, making loans more expensive and adding pressure to financial markets.

Analysts say this crunch could stick around for a while, so don't expect relief soon.