Why did RBI inject ₹50,000 crore into banking system?
On July 22, 2025, the Reserve Bank of India (RBI) unexpectedly injected ₹50,000 crore into the banking system through a special two-day auction.
This quick move aimed to help banks deal with a cash crunch after recent GST payments made money tighter across the system.
Banks were eager for funds
Banks were eager for funds, bidding over ₹71,000 crore even though only ₹50,000 crore was on offer.
The RBI settled at an average rate of 5.58%.
Despite headline numbers showing plenty of liquidity, most of it was locked away—leaving banks with far less to actually use each day.
The RBI has been actively managing how much cash
The RBI has been actively managing how much cash is sloshing around to keep interest rates steady without changing its main policies.
As V Rama Chandra Reddy from Karur Vysya Bank put it, this timely support "helped manage rates when we needed it most"—all without any big policy shakeups.