India Monetary Policy RBI MPC Decisions — October 29, 2026

Weighted average call rate of 5.59% sits within the corridor, with SDF absorption of ₹1,46,807 crore at 5.25% and repo at 5.55%, consistent with surplus liquidity and an orderly money market

Scheduled commercial banks' cash balances of ₹8,47,924 crore exceeded the average daily requirement of ₹8,33,309 crore by about ₹14,615 crore for the fortnight ending October 31, 2026, implying no reserve shortfall

Surplus of ₹10,14,401 crore as of September 30, 2026 supports ample transmission capacity for bank lending and short-term credit

Only ₹8,406.87 crore drawn, a limited reliance on emergency liquidity that signals low funding stress among banks

Term notice money at 5.33% sits below the 6.00% term market repo rate, a term-structure shape that suggests markets are not pricing near-term tightening

Term repo in corporate bonds at 7.50% is the highest term-segment rate, indicating a wide premium for non-sovereign collateral and a possible headwind for corporate bond issuers

Term repo in corporate bonds at 7.50% versus 6.00% for term market repo implies a roughly 150 bps spread that could raise refinancing costs for non-sovereign borrowers

The reserve surplus of about ₹14,615 crore is small relative to total balances of ₹8,47,924 crore (roughly 1.7%), leaving limited buffer if liquidity conditions tighten

Current surplus conditions depend on RBI absorption operations; a shift in government cash balances or currency demand could quickly erode the ₹10 lakh crore durable surplus

The filing covers a single operational day and lacks comparison periods, so trend conclusions about liquidity direction cannot be drawn with confidence

Overnight rates anchored near 5.5% with a surplus durable liquidity position supports carry strategies in short-duration government and money market instruments

Ample, low-cost system liquidity and minimal SLF usage support stable funding costs for scheduled commercial banks in the near term

The gap between term notice money (5.33%) and term repo (6.00%) offers a reference for relative-value trades across term funding tenors

Durable liquidity surplus of ₹10,14,401 crore and reserve compliance indicate a system-wide liquidity-surplus regime, with the RBI absorbing excess via SDF and repo operations

The 150 bps gap between sovereign-backed term repo and corporate bond term repo highlights differentiated funding costs by collateral quality, relevant to NBFCs and corporate treasuries

Monitor bank cash balances against the ₹8,33,309 crore requirement for the fortnight ending October 31, 2026, as the cushion is only about ₹14,615 crore

No date provided in this filing; monitor the MPC calendar for any change to the repo rate or the corridor that would reprice the 5.25%-5.55% operating band

Track whether SLF usage rises from the current ₹8,407 crore, which would signal emerging funding stress

Watch whether this rate narrows toward the term market repo level, a useful indicator of credit-market risk appetite

Obtain subsequent-period figures to establish whether the ₹10,14,401 crore surplus is expanding or contracting

Monitor daily SDF volumes (₹1,46,807 crore today) for shifts in excess liquidity that could signal changing policy transmission