Why is the RBI pulling liquidity out of banks and injecting it back again?

What happened: The Reserve Bank of India reduced banking system liquidity from a peak surplus after banks received funds from overseas Indians under the FCNR(B) scheme, using reverse repo auctions and cash reserve ratio adjustments to absorb the surplus. Why it matters: Overnight rates increased following the liquidity measures, prompting RBI to temporarily infuse funds to manage sharp rate rises.

RBI balancing liquidity drain with fund injection signals active monetary management.

RBI balancing liquidity drain with fund injection signals active monetary management. — impact context not separately stored; see What changed.