India’s banking system liquidity surplus is likely to ease by the end of this week amid tax outflows, after having posted its biggest jump in four months in the seven days to Friday, said traders.

** Average banking system liquidity surplus for the last week that ended on Friday stood at 1.59 trillion rupees, more-than-double the 728 billion rupees for week ended Jul. 29. ** Banking system liquidity surplus rose around 864 billion rupees, its biggest such rise since week ended Apr. 8, according to RBI data. ** "We will see the complete impact of non-GST (Goods and Services Tax) outflow this week, and there could be some spike in currency in circulation due to festivals which could weigh on surplus position," a trader at a state-run bank said.

** Traders anticipate surplus to average in the 1.10 trillion rupees to 1.30 trillion rupees band this week that ends on Aug. 12. ** India’s two-day interbank call money rate is trading at 5.25%, while the overnight tripartite repo, or TREPS, rate was at 5.14%. Reserve Bank of India's repo rate stands at 5.40%. (Reporting by Dharamraj Lalit Dhutia Editing by Dhanya Ann Thoppil)