The Reserve Bank of India has asked banks to ensure that they have sufficient collateral securities in their accounts while borrowing under the repo window.

These instructions were issued in view of the restrictions announced by RBI on Monday to stem rupee’s fall. Accordingly, with effect from today, RBI will limit the daily borrowing by banks to 75,000 crore rupees.

In a notification issued from Mumbai yesterday, RBI further informed banks that the revised cap of 75,000 crore rupees will be applicable to the combined amount in morning and evening repo auctions on reporting Fridays.

Consequently, just a day before the RBI restrictions came into effect; bank borrowings from the repo window hit a record high of 2.16 lakh crore rupees yesterday.

Meanwhile, ensuring some relief for customers, banks have said that RBI’s measures to tighten liquidity will not lead to a hike in lending rates. In a statement issued yesterday, SBI said that there was no need to adjust lending rates.

It said that RBI’s measures are designed to curb speculation in the forex market and SBI does not see them as indicative of any systemic problem or deeper malaise.

Agreeing with SBI, the Chairman and Managing Director of Bank of Baroda, S S Mundra said that this action of RBI action will shortly stabilize the rupee.

Meanwhile, Bank of India Chairman and Managing Director V R Iyer said it will not roll-back its recent reduction in base rate.