Reserve Bank of India Deputy Governor, Shyamala Gopinath, has said there is a “potential liquidity” available in the system, in the wake of recent concerns over a liquidity crunch in the system.

She said, the central bank’s recent liquidity infusion moves like the second Liquidity Adjustment Facility (LAF) and the second one percent below Statutory Liquidity Ratio (SLR) have given a terrific confidence to market participants. While speaking on the sidelines of the launch of interbank mobile payment service in Mumbai on Monday, Gopinath said, “It has given a lot of confidence to them…there is so much more potential liquidity in the system”.

She said, “It they have not drawn from the one per cent Statutory Liquidity Ratio as you say, it means that there is potential liquidity available in the system for the banks to draw if they require it”, when pointed out that banks are drawing over Rs one trillion everyday for around a month from the Reserve Bank as compared to the usual Rs 700 billion and are not using the Statutory Liquidity Ratio facility.

Gopinath further added that the Reserve Bank of India has been monitoring the liquidity situation very closely. Subir Gokarn, RBI Deputy Governor, had indicated that the central bank is very much concerned over the excess deficit in liquidity; it has crossed Rs. 50,000 crore comfort zones which it has constructed of its own.