UPDATE 1-Indian cash rates hit 7-mo highs on tight liquidity

(Updates to close)

MUMBAI, Aug 20 (Reuters) - Indian overnight call rates rose to seven-month highs on Wednesday amid tight cash conditions ahead of treasury bill auctions and traders said the bank union strike was not seen affecting volumes in the market.

Call rates INROND= ended at 9.40/9.60 percent, off a high of 9.80 percent, its highest since Jan. 18 and marginally lower than 9.50/9.60 at close on Monday. Trading was closed on Tuesday for a central bank holiday.

"The call rates are marginally up, with shortage of liquidity in the market, rates are expected to be above 9.25 percent levels. We have a shortage of about 350 billion rupees," a senior dealer with a private bank said.

The Reserve Bank of India sold 45 billion rupees worth of treasury bills earlier in the day, the outflows for which will take place on Friday.

It will also sell another 60 billion rupees worth of bonds on Friday.

The weighted average rate in the call money market was 9.58 percent, while collateralised borrowing and lending obligation (CBLO), a secured form of money market lending, was 8.42 percent, according to the Clearing Corp of India (CCIL).

Volume in the call money market was 142.29 billion rupees and in CBLO it was 222.84 billion rupees, CCIL data showed.

Unions representing some bank employees were on strike on Wednesday, to protest against consolidation of state-run banks. See [ID:nBOM285113].