India\'s bonds fell on concern demand for the notes could wane as the government\'s debt sales drain cash from the banking system. Banks borrowed an average Rs1.3 trillion (Dh95.4 billion) a day from the central bank to meet shortages in the past month, according to data from the Reserve Bank of India. That\'s more than double the Reserve Bank\'s preference of Rs600-billion deficit, according to a statement from the central bank on January 24. Inflation Bonds also fell on concern government data due February 14 will show India\'s inflation rate was 6.70 per cent in January, according to the median of 23 estimates in a Bloomberg News survey. That would still be higher than the central bank\'s so-called comfort zone of 4 per cent to 6 per cent. \"It is too early to expect a rate cut\", according to a BNP Paribas Wealth Management note to clients published yesterday. Moreover \"system liquidity is still tight\" and \"there would be seasonal liquidity tightness in March.\" Yield The yield on the 8.79 per cent note due November 2021 rose one basis point, or 0.01 percentage point, to 8.21 per cent in Mumbai, according to the central bank\'s trading system. The cost of one-year interest-rate swaps, or derivative contracts used to guard against fluctuations in funding costs, decreased one basis point to 8.12 per cent, according to data compiled by Bloomberg.