economy
RBI's Rs 12.7 trillion infusion: Where did it go?
Dec 29, 04:12

The RBI swung into action quickly after Covid-19 was declared as a pandemic to avoid a liquidity shock. In several rounds, the central bank announced liquidity measures worth a total of Rs 12.7 lakh crore since February this year.

Where have all this money gone?

Only a small part of this money has been used for actual lending. A significant chunk of this money has been parked by banks back in the central bank's reverse repo window at 3.35 per cent. If one looks at the last few months, banks have been parking an average Rs 6 lakh crore in the central bank's reverse repo window as there is no major loan demand in the credit market.

trend in reverse repo rate