By Dharamraj Dhutia
MUMBAI, – India’s central bank system that enables lenders to manage their day-to-day liquidity needs did not work on Tuesday due to a technical issue, treasury officials said, its first such failure since it was set up nearly four years ago.
The automated sweep-in and sweep-out system (ASISO), using which banks park funds at the central bank’s Standing Deposit Facility and borrow at its Marginal Standing Facility, went down and funds were neither debited nor credited by the Reserve Bank of India, the officials said.
“There was a technical issue, and the ASISO facility in e-kuber that gets automatically triggered around midnight did not go through, so funds have not changed hands,” a senior treasury official at a large private bank said.
The central bank did not immediately reply to a Reuters’ query seeking comment.
The treasury officials declined to be named as they are not authorised to speak to media.
As of 10:45 a.m. IST on Wednesday, the RBI did not publish a daily money market operation statement, which has data on liquidity position of the banking system, and is generally published at 9:00 a.m. IST.
Indian banks need to park 4.5% of their net deposits with the central bank and must maintain at least 90% of this requirement every day. The Marginal Standing Facility helps lenders who are short of funds access them from the central bank.
“It is still not clear whether the system is working, but the central bank should not penalise banks that were short of cash maintenance requirement, as the fault has been from the system’s side,” a trader said.
(Reporting by Dharamraj Dhutia; Editing by Mrigank Dhaniwala)
