UPDATE 1-India authorities meet on G20; cash rates rise

(Recasts with market moves, details, quotes)

By Manoj Kumar

NEW DELHI, Oct 29 (Reuters) - Indian overnight lending rates jumped in a cash squeeze on Wednesday, but bond yields fell on hopes of more steps to ease liquidity after top Indian policy makers met to discuss strategy ahead of a global meeting on the financial crisis.

Leaders of G20 nations are expected to meet at an international financial summit on Nov. 15 to examine ways to overhaul the financial system following the global credit crisis.

China's central bank cut banks' lending and deposit rates by 0.27 percentage points on Wednesday, ahead of a decision by the Federal Reserve in which it was widely expected to ease policy.

Indian authorities have taken several steps to soften the impact of the turbulence on the broader economy, including a surprise 100 basis point cut in the repo or main lending rate to 8.0 percent four days before a scheduled review on Oct. 24.

But call money, the overnight rate banks charge each other, hit a two-week high above 13 percent on Wednesday as treasury bill sales and expectations of a bigger sale of government bonds pushed up demand in a holiday-shortened week.

"Liquidity crunch remains a problem in the context of the global financial crisis," said K.C. Chakrabarty, chairman and managing director of Punjab National Bank (PNBK.BO: Quote, Profile, Research), the country's third-largest bank.

"Now the issue is of lack of confidence in the market and we expect a cut in the repo rate by the Reserve Bank of India."