India’s financial markets are turning up the heat on policymakers, seeking tax relief for foreign investors and a revival of NRI-focused deposit schemes to ease a tightening liquidity environment. But the Reserve Bank of India (RBI) appears unwilling to return to the crisis-era tools that helped stabilise the rupee and attract over $30 billion during the 2013 taper tantrum. Liquidity stress is evident across the system. Deposit growth continues to lag credit expansion, forcing banks to sharply raise bulk deposit and certificate of deposit (CD) rates. “The real challenge is liquidity, not rates or pricing. If liquidity were comfortable, CD rates wouldn’t be where they are,” said Anshul Chandok, Head of Treasury at RBL Bank. Several smaller banks are offering more than 8% on bulk deposits, a level last seen before the rate-cut cycle began.