The Centre on Friday raised the limit of bonds issued under the cash-absorbing Market Stabilisation Scheme to Rs 6 lakh crore from Rs 30,000 crore, The Financial Express reported. Sales of the securities under the MSS by the Reserve Bank of India raised Rs 20,000 crore while bids were received for bonds worth Rs 40,765 crore. The financial instruments had an indicative yield of 6.15%.

The move is being seen as a measure to help banks invest the surplus in liquidity they have received because of the amount of deposits made after the demonetisation of Rs 500 and Rs 1,000 notes by the Centre on November 8. At least Rs 8 lakh crore has been deposited in banks across the country following the discontinuation of the high-value notes, according to The Times of India. Money raised through the sale of the MSS bonds cannot be used by the government and will not add to the deficit, according to the daily.

Chief economic advisor (economic research department) at State Bank of India SK Ghosh said the move would “drain excess liquidity from the system if managed properly”. The government and the RBI have taken several measures to soak up the cash introduced into the banking system because of the large number of deposits, including through setting the cash reserve ratio for banks at 100%. However, the country has been grappling with a cash crunch, with the RBI and Centre repeatedly revising rules to exchange the old notes.