Indian o/n call rates end higher on tighter cash

(Adds clearing house data, updates closing figures)

MUMBAI May 26 (Reuters) - Indian overnight money rates ended higher on Monday, after outflows towards bond auctions drained cash from the system and an increase in banks' cash reserve ratio (CRR), which kicked in over the weekend.

Call rates ended at 7.25/7.40 percent, off an intra-day high of 7.75 percent and up from Friday's close of 5.50/5.60 percent.

"The increase in CRR has made the market short on cash, there is little or no excess liquidity in the market at the moment," a dealer with a primary dealership said.

The Reserve Bank of India at its policy review on April 29 increased the banks' cash reserve requirement, the amount of deposits banks' have to keep with it, by 25 basis points to 8.25 percent.

The rise, which kicked in over the weekend, is expected to have drained about 90 billion rupees from the system.

The central bank sold 100 billion rupees worth of bonds on Friday, outflows towards which took place on Monday.

The weighted average rate in the call money market was 7.43 percent, while collateralised borrowing and lending obligation (CBLO), a secured form of money market lending was 7.06 percent, according to the Clearing Corp of India (CCIL).

Volume in the call money market was 126.65 billion rupees and in CBLO it was 454.68 billion rupees, CCIL data showed.

The central bank absorbed 7.8 billion rupees from various banks at its daily reverse repo auction on Monday, against 296.10 billion on Friday, indicating a sharp decline in excess cash with banks.

Traders said they expect call rates to stay above 7 percent through the week. (Reporting by Swati Bhat; Editing by Sunil Nair)