Mumbai: Deficit liquidity in the banking system surged to an all-time high this week, topping the ₹3 lakh crore mark, as tax outflows, currency leakages and a slow pace of government spending led to a cash crunch with lenders, pushing up borrowing costs across the economy.As of January 23, the liquidity deficit – measured by the amount banks borrowed from the Reserve Bank of India – was at ₹3.34 lakh crore, the highest ever, Reserve Bank of India data showed. The last time the amount of funds injected by the RBI into the banking system had topped the ₹3 lakh crore mark was in April 2016.
A consequence of the tight liquidity was…