The Reserve Bank of India conducted an overnight Variable Rate Reverse Repo (VRRR) auction on September 28, 2026. The RBI VRRR auction attracted bids worth ₹1,11,711 crore against a notified amount of ₹2,00,000 crore. The central bank accepted all received offers at a cut-off rate of 5.24%.
Key Details of the RBI VRRR Auction
The auction was a 1-day tenor instrument, designed to absorb surplus liquidity from the banking system. Banks submitted total offers of ₹1,11,711 crore, which fell well below the notified limit. As a result, the RBI accepted every bid without any partial acceptance requirement.
The cut-off rate and the weighted average rate both settled at 5.24%. This alignment indicates a tight clustering of bids around a single rate. Therefore, no partial acceptance percentage was applicable in this case. Additionally, the full absorption of submitted bids reflects orderly participation by banks.
What This Means for Liquidity Management
The VRRR mechanism allows the RBI to manage short-term liquidity conditions effectively. However, the lower-than-notified subscription suggests banks held relatively moderate surplus funds on this date. Meanwhile, the 5.24% rate signals the prevailing short-term interbank lending environment.
For example, when banks park excess funds with the RBI through VRRR auctions, it helps keep inflation-linked liquidity in check. This tool, therefore, plays a critical role in the central bank’s daily monetary operations. Investors and treasury teams closely watch these results to gauge system-wide liquidity trends.
About Variable Rate Reverse Repo Auctions
The RBI regularly conducts VRRR auctions as part of its Liquidity Adjustment Facility (LAF). These auctions allow scheduled commercial banks to deposit surplus funds with the RBI at market-determined rates. Additionally, they help the central bank fine-tune liquidity without making permanent policy changes. The overnight tenor specifically targets very short-term cash management needs of banks.
Market participants view each VRRR result as a snapshot of daily banking sector liquidity. As a result, these releases serve as important data points for analysts and economists tracking monetary conditions in India.
Source: RBI Press Releases
