New Delhi, Jan. 8 -- Striking a cautionary note on the demand for pumping liquidity into non-banking financial companies (NBFCs) ahead of Tuesday's meeting with their representatives, Reserve Bank of India (RBI) governor Shaktikanta Das on Monday said RBI will avoid a situation of excess liquidity in the economy and any infusion of liquidity will have to be need-based.

"RBI would not like a loose money kind of liquidity situation. Any infusion of liquidity will have to be very carefully considered and has to be need-based. Therefore, caution and care has to be exercised by RBI so that adverse consequences of excess liquidity are not created," Das said.

NBFCs, a key source of funds for small businesses, saw liquidity drying up after debt-l...