Rajan says will ensure plentiful liquidity in banking system

The Reserve Bank of India (RBI) will use all instruments, including open market operations (OMO) to infuse "plentiful" liquidity into the banking system, Governor Raghuram Rajan said on Tuesday, after keeping key rates unchanged in its policy review.

Raghram Rajan said a perception that the banking system is facing an "enormous liquidity shortage" is not consistent with reality.

"We will look at the emerging liquidity needs and use all instruments to manage those," Rajan told reporters.

The RBI kept its key policy repo rate unchanged at 6.75 percent, opting to wait for the annual budget statement for clarity on the fiscal consolidation roadmap.