New Delhi, Sept. 11 -- The Reserve Bank of India on Friday moved to drain the banking system's dollar deluge from the runaway success of its special foreign deposit scheme, announcing plans to drain Rs.1 trillion through open market bond sales. The central bank said it will sell sovereign securities across three tranches -offering Rs.50,000 crore on 17 September, followed by two offerings of Rs.25,000 crore each on 21 and 28 September.

The announcement comes after system liquidity crossed Rs.11 trillion earlier this month, with RBI's special window for foreign currency non-resident deposit (FCNR-B) deposits attracting $172.2 billion in just two months. This prompted the central bank to withdraw surplus liquidity of over Rs.8 trillion thr...