The report links the surplus to an RBI swap facility for fresh dollar-denominated FCNR(B) deposits. It describes the concessional window as covering June 2023 to August 2026, allowing banks to exchange those dollars for rupees. The arrangement brought in foreign exchange but also added substantial rupee funds to the banking system.

Among the options under consideration is a temporary increase in the Incremental Cash Reserve Ratio, or ICRR. This would require banks to park more of their additional deposits with the RBI. Government-security sales through the Market Stabilisation Scheme or open-market operations are also being considered to drain funds.

DBS Bank economist Radhika Rao noted that tax outflows and festive-season cash demand during September-November would absorb some liquidity, but further intervention was needed. Barclays analysts put the surplus requiring urgent attention at roughly ₹7.5 lakh crore and expect temporary tools rather than a lasting rise in the regular CRR.

The RBI has already used Variable Rate Reverse Repo auctions, which let banks place surplus money with it temporarily for interest. It took in more than ₹5.5 lakh crore on one Thursday, with further auctions planned. A regular auction schedule, a temporary ICRR increase and possible bond sales remain key developments to watch; the report does not state a final decision.