The Reserve Bank of India (RBI) will meet select primary dealers and banks on Tuesday, three traders aware of the development told Reuters, amid concerns that tightening liquidity in the banking system is pressuring the government bond market. The meeting, though without a formal agenda, is expected to focus on current market conditions, the traders said, declining to be named as they are not authorized to speak to the media. The RBI on Friday canceled an auction of 110 billion rupees ($1.25 billion) in seven-year government securities, triggering a seven-basis-point drop in the benchmark bond yield. All three traders said the central bank may be concerned about prevailing yield levels. Banking system liquidity has fluctuated between surplus and deficit over the past two weeks, affecting bond market sentiment. RBI Governor Sanjay Malhotra noted last month that there is room for bond yields to decline.