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RBI absorbs Rs 2.40 lakh crore from banking system through VRRR auctions
Sep-18-2026

Amid huge surplus liquidity, the Reserve Bank of India (RBI) has absorbed Rs 2.40 lakh crore from the banking system through variable rate reverse repo (VRRR) auctions. The RBI received bids worth Rs 2,39,959 crore, which it accepted fully, at a cut-off and weighted average rate of 5.24 per cent.

Since last month, the RBI has been conducting various VRRR auctions in order to absorb excess surplus liquidity from the banking system and align the overnight money market rates to the repo rate. Currently, liquidity in the banking system is estimated to be in surplus of around Rs 7.38 lakh crore as on September 16.

Apart from VRRR, last week, the BRI announced Open Market Operation (OMO) sales of government securities for a notified amount of Rs 1 lakh crore in three tranches. RBI said the first tranche of Rs 50,000 crore will be held on September 17, and Rs 25,000 crore each on September 21 and September 28.

The banking system has a huge surplus of liquidity due to heavy mobilisation of FCNR (B) deposits by banks, which brought foreign currency into the system, while subsequent swaps with the RBI provided rupee liquidity to banks. Besides FCNR(B) inflows, month-end government expenditure, including payments toward salaries and pensions, also added to liquidity in the banking system.


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