Mumbai: The Reserve Bank of India (RBI) consulted top bank treasury heads recently to seek their inputs with the central bank’s intervention in the forward market having failed to check the rupee’s rise, multiple sources familiar with the matter told ET.Banks suggested that the central bank intervene in the spot market instead but do so in conjunction with liquidity draining measures such as Special Deposit Schemes (SDS), Market Stabilisation Bonds (MSS) or even RBI-issued bonds, although the latter will require a legislative change.“The RBI is constrained by surplus liquidity, which limits its ability to intervene via the spot market,” said one of the persons present in the meeting. Three foreign, two private and two public sector lenders among others participated in the virtual meeting last week.RBI did not reply to ET’s query.The rupee has turned out to be the best-performing currency among its Asian peers during the January-March quarter with just a 0.06% fall in value against the dollar, show Bloomberg data.“RBI could not figure out the reason why it is so when there is no such strong fundamental reason backing this,” said one of the executives cited above.The rupee gained 0.35% to close at 73.12 per dollar Wednesday.The banking system has a net surplus of Rs 8.39 lakh crore. If the RBI buys dollars in the spot market to checking any sharp rise in the local currency, it will inject more rupees into the system, already awash with cash. Also, RBI needs to keep space for bond purchases for yield management.