New Delhi, Oct. 27 -- Tightening liquidity conditions in the banking system have pushed up short-term borrowing costs, prompting the Reserve Bank of India (RBI) to inject funds into banks. Meanwhile, rising crude oil prices have exerted additional pressure on government bond yields, according to an ICICI Bank report.

The report attributed the sharp decline in surplus liquidity to goods and services tax (GST) payments, higher cash reserve requirements and other factors. As of October 23, the banking system's liquidity surplus stood at Rs 50,000 crore, equivalent to 0.2 per cent of net demand and time liabilities (NDTL).

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