RBI Suctions ₹75,026 Crore via Over Night VRRR Due to Continued Liquidity Surplus in Banking
Last Updated: 23rd September 2026 - 05:28 pm
Reserve Bank of India sucked liquidity worth ₹75,026 crore from the banking system by conducting an overnight variable rate reverse repo auction on September 23 amid continued liquidity surplus in the banking system.
Bids for the auction amounted to ₹87,993 crore with the Reserve Bank accepting ₹75,026 crore at a cut-off and weighted average rate of 5.24%.
The RBI has been conducting variable rate reverse repo auction since last month in order to suck excess liquidity in the system and ensure that the overnight money market rates remain around the repo rate.
Excess liquidity in the banking system was ₹4.45 trillion as of September 22.
Furthermore, Reserve Bank of India has also been sucking liquidity in the form of open market operations. RBI conducted sale of government securities worth ₹50,000 crore on September 17 and further ₹25,000 crore on September 21.
Next ₹25,000 crore will be sold on September 28, which means that total announced OMO sales would amount to ₹1 trillion.
In case of an OMO sales take place, then the banks, along with other market participants, will purchase the securities issued by the RBI and thus liquidity in rupee terms will be absorbed out of the banking system.
The recent surplus has been possible due to strong mobilization of FCNR(B) deposits by the banks. Foreign currency had entered into the system because of these deposits whereas the subsequent swaps with the RBI created liquidity in rupee terms.
Month-end expenditure of the government including salary and pension payments has also been one of the reasons behind the increased liquidity.
Latest VRRR auction at overnight level is one such measure taken by the RBI to mop up the excess liquidity.
- Flat ₹20 Brokerage
- Next-gen Trading
- Advanced Charting
- Actionable Ideas
Trending on 5paisa
Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing. For detailed disclaimer please Click here.