RBI data shows liquidity crunch could be over

The year-long grouse of NBFC, Mutual Funds and India Inc that liquidity is too tight, no longer holds. RBI data indicates that yesterday, banks lent Rs 86,600 crore of cash to the RBI through its reverse repo window. This is largely because the government has begun spending money lying idle in its account throughout May; also bond dealers say June, July and August are months when cash withdrawals falls and liquidity returns to banks.