Flush with funds, banks show little interest in RBI's repo operations

The Reserve Bank of India (RBI) received just Rs 1,000 crore worth of bids for its 56-day term repo auctions, as against Rs 50,000 crore offered. 

Through repo operations, the RBI injects liquidity into the banking system. The cut-off yield was 4 per cent, which is at par with the policy repo rate. The reason why there was so little interest for the auction is that the system is now flush with liquidity. 

Banks parked in excess of Rs 6.40 trillion with the central bank on Thursday. Such high liquidity has also ensured that commercial papers of highly rated firms, even for