With the RBI anticipating a liquidity crunch in the economy taking into account factors like the payment by telecom companies and advance tax outgo, the central bank has recently announced some liquidity measures for the banks that may help to maintain enough liquidity in the system.

According to the recently made announcement by the RBI, the banks operating in the Indian geographies can avail LAF to the extent of up to 0.5 per cent of their net demand and time liabilities (NDTL).

RBI also highlighted the fact that since its latest assessment as far as the liquidity condition is concerned say that there could be a liquidity crunch in the system due to the advance tax payments and 3G auctions.

It is believed that nearly Rs. 70,000 will be getting out of the banks when the telcos will make the payment for the 3G licenses to the government.

In fact, coupled with the advance tax payment, it is expected that around 1,00,000 crore will be taken out of the system in the coming days that has a lot of potential to create a liquidity crunch in the system.