MUMBAI, June 19 (Reuters) - Indian overnight cash rates were steady on Thursday on tight cash conditions after liquidity was drained from the system due to outflows towards quarterly taxes and ahead of a bond auction on Friday.

At 3.50 p.m., call rates <INROND=> were at 8.00/8.05 percent, barely moved from its previous close of 8.00/8.10 percent.

"Cash is tight due to advance tax outflows, and we also have the auctions tomorrow, so we may see call rates staying at these levels for some time," a dealer with a state-run bank said.

Banks borrowed 115.75 billion rupees from the central bank at its daily repo auction on Thursday, much higher than 62.70 billion rupees at the previous auction, indicating shortage of cash with banks.

Banks have to report their cash balances to the Reserve Bank of India every two weeks and the reporting day for this fortnight falls on this Friday.

Companies and banks are currently paying their quarterely taxes, in anticipation of their profits at year-end.

The central bank will be selling 60 billion rupees worth of bonds on Friday, further tightening cash in the system.

Dealers said they expect call rates to start easing once government spending picks up in the next fortnight. However, they do not expect it to fall below 7 percent in the near-term.

(Reporting by Swati Bhat; editing by Sunil Nair) (([email protected]; +91-22-6636-7353; Reuters Messaging: [email protected])) Keywords: INDIA MARKETS/CALL