India’s banking-system liquidity reached a record 11.6 trillion rupees on Sept. 6, prompting the Reserve Bank of India to absorb more than 6 trillion rupees through 30-day and overnight operations. Banks placed 2.59 trillion rupees in the 30-day auction and offered 3.53 trillion rupees at the overnight auction, while the RBI’s total liquidity withdrawals exceeded 8.5 trillion rupees. The 30-day operation was intended to withdraw 7 trillion rupees, but participation was limited; traders attributed this to technical glitches, while an unnamed person familiar with the matter said all bids passed through the RBI’s e-Kuber system without glitches. Earlier reporting in the existing record had put the liquidity surplus at 10.73 trillion rupees. Sustained excess funds could add to inflation and financial-asset risks as the RBI has indicated that rate increases may be ahead if inflation and growth strengthen. The benchmark 6.94% 2036 government bond yield previously ended at 6.9625%, up 5 basis points for the week, with oil and elevated U.S. Treasury yields also weighing on bonds. Banks’ reluctance to lock funds into longer-tenor operations could lead the RBI to combine instruments such as market stabilization scheme bonds and sell-buy swaps, while the funds withdrawn will return as the operations mature.