Reserve Bank of India Injects ₹2.5 Trillion Into Banking System

The Reserve Bank of India injected ₹2.5 trillion into the banking system through repo auctions starting October 19, 2026. This liquidity infusion occurred alongside the cancellation of all Treasury bill auctions and a move to shift the operating rate to the upper end of the policy corridor.

SBI Research criticized the central bank's actions, arguing that the infusion contradicts the RBI's stated commitment to a calibrated tightening cycle intended to control inflation. The research arm suggested that the RBI may be attempting to address financial stability concerns or fine-tune bond yields amid global market volatility and geopolitical conflicts.

Despite these interventions, SBI Research expects Indian government bond yields to remain elevated around 7.6%, citing the impact of high crude oil prices. The organization advised the central bank to avoid a two-way liquidity management policy that involves simultaneous injection and withdrawal.