The head of the Reserve Bank of India (RBI) has urged banks to lend their surplus funds to their peers rather than depositing them at a central bank facility. Shaktikanta Das stated that it is more desirable for banks to explore lending opportunities in the interbank call market, rather than passively parking funds in the standing deposit facility at less attractive rates. The Indian banking system has been facing a liquidity deficit, and Das believes that greater volume of call money transactions would help deepen the interbank money market and lower the reliance on the marginal standing facility.
