'Liquidity deficit concerning, RBI needs to be proactive'

There is a liquidity deficit in the banking system and the Reserve Bank needs to be more proactive in managing this area of concern, the economic research wing of SBI said as per the media reports.

"With enhanced Liquidity Coverage Ratio kicking in from January 2016 (from 60 per cent to 70 per cent) and deposit growth lagging, RBI may have to be proactive in managing the liquidity deficit through tools available at its disposal," its economists said in a note.

Terming it as a "concern", the note said the systemic liquidity has turned into a significant deficit mode.

It said as of now, the liquidity deficit is averaging around Rs 1.5 trillion compared to around Rs 500 billion over October-November period but conceded that there might be some seasonal factors causing it.

It also acknowledged that the RBI is engaged in doing term repos for mitigating the liquidity tightness.