Modi ' s demonetisation move risks bond shortage for RBI Livemint Mumbai Prime Minister Narendra Modi ' s shock ban on highdenomination currency notes may present a tricky situation for India ' s central bank a shortage of bonds needed to manage its moneymarket operations . Banks had a record Rs 4 . 3 trillion parked with the Reserve Bank of India against bonds as of 22 November , according to India Ratings amp While the RBI risks running short of bonds to offer to banks , the European Central Bank was earlier this year faced with a dearth of securities to purchase under governor Mario Draghi ' s bondbuying program . Banks in India need to set aside a minimum of 4 % of their deposits as cash with the RBI , called the cash reserve ratio , without earning any interest on them . The pace of increase in banking system liquidity suggests that the RBI may have to soon resort to liquidity mopping up tools that are beyond its current tool chest , said Vivek Rajpal , an interestrates strategist at Nomura Holdings Inc .