New Delhi, Oct. 27 -- Tightening liquidity in the banking system has pushed up short-term borrowing rates and prompted the Reserve Bank of India (RBI) to inject funds into banks, while rising oil prices are adding pressure on government bond yields, according to a report by ICICI Bank.

The report said the banking system's surplus liquidity fell sharply due to Goods and Services Tax (GST) payments, higher cash reserve requirements and other factors. The surplus stood at Rs 50,000 crore, or 0.2 per cent of net demand and time liabilities (NDTL), as of October 23.

"System liquidity surplus declined sharply on account of outflows for GST payments, which led to the RBI conducting VRR operations," the report said.

The RBI has started conduct...