The Reserve Bank of India (RBI) conducted an overnight VRRR auction on September 30, 2026. Banks bid ₹85,424 crore against a notified amount of ₹2,00,000 crore. The RBI accepted the full ₹85,424 crore received in offers.
Key Details of the VRRR Auction
The auction ran for a 1-day tenor, as is standard for overnight operations. Both the cut-off rate and the weighted average rate settled at 5.24%. Additionally, the partial acceptance percentage was not applicable, since total bids fell well below the notified limit.
The lower-than-notified participation suggests banks chose to deploy surplus funds selectively. However, the full absorption of submitted bids shows the RBI maintained its commitment to liquidity management. As a result, ₹85,424 crore moved from the banking system back to the central bank for one day.
What This VRRR Auction Means for Liquidity
The RBI uses Variable Rate Reverse Repo auctions to absorb excess liquidity from the banking system. Therefore, this operation helps the central bank keep short-term interest rates aligned with its policy stance. Meanwhile, a utilisation rate of roughly 43% of the notified amount points to moderate surplus liquidity conditions in the system.
For example, when banks park fewer funds than offered, it often signals that overnight call money rates are competitive. Additionally, a weighted average rate of 5.24% reflects stable short-term borrowing costs. This outcome, however, does not signal any immediate shift in the RBI’s monetary policy direction.
About RBI Overnight VRRR Operations
The RBI regularly conducts VRRR auctions as part of its Liquidity Adjustment Facility (LAF). These operations give banks a safe avenue to park surplus funds with the central bank overnight. As a result, they play a key role in day-to-day monetary management across Indian financial markets.
The auction was conducted under Press Release 2026-2027/1214, issued by Deputy General Manager (Communications) Ajit Prasad. For complete official details, readers can visit the RBI’s official press release.
Source: RBI Press Releases
