Bankers await signs on Indian cenbank's liquidity approach amid persisting disconnect

The Reserve Bank of India seal is pictured on a gate outside the RBI headquarters in Mumbai, India, February 2, 2016. REUTERS/Danish Siddiqui/File Photo

A second VRRR auction of 1 trillion rupees was announced on Monday - this time for just 4-days, but was not fully subscribed."Banks are not parking funds with the RBI because they are unsure about how long the surplus liquidity will last," said Soumyajit Niyogi, a director of the core analytical group at India Ratings & Research.

"There is an opportunity cost for banks to park that liquidity for 14-days because they give up options to invest this elsewhere such as in treasury bills," the official said, declining to be identified as he is not permitted to speak to the media.

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