With issuances of Certificates of Deposit (CDs) likely to come down, mutual fund houses might increase their investments in other short-term instruments. The Reserve Bank of India (RBI) had revised the framework for liquidity management last week.The central bank said last week it would conduct more frequent term repos and overnight variable rate repo auctions. So far, RBI has been doing term repos and overnight fixed rate repo auctions. The aim is to help banks manage liquidity in a better way. The new framework shall begin from September 5.

Source - http://www.business-standard.com