RBI Mops Up ₹6 Lakh Crore Via VRRR Auctions; Offer Sees Tepid Response

The Reserve Bank of India (RBI) absorbed more than ₹6 lakh crore from the banking system through two variable rate reverse repo (VRRR) auctions on September 7, 2026, as per The Hindu news report.  

The auctions were conducted amid surplus liquidity of around ₹11.16 lakh crore as of September 6, 2026. The first auction was for a 30-day VRRR, with ₹7 lakh crore notified.  

Banks submitted bids worth just over ₹2.59 lakh crore. The RBI accepted the bids at a cut-off and weighted average rate of 5.24%. 

Overnight VRRR Gets Better Response 

The RBI followed the first auction with an overnight VRRR auction for ₹5 lakh crore. Completed at 11:30 hrs, the auction received bids worth ₹3,53,390 crore, covering more than 70% of the notified amount. 

The central bank accepted the full amount at a cut-off and weighted average rate of 5.24%. The higher participation compared with the 30-day auction indicated greater demand for the shorter-tenure option. 

Liquidity Rises After Forex Inflows 

The RBI has increased liquidity absorption operations after large inflows through its special FCNR(B) deposit scheme. Its special forex measures had mobilised $136.38 billion by August 31. 

Of this, $127.23 billion came through FCNR(B) deposits, while $5.26 billion was mobilised through OFCBs and $3.89 billion through ECBs. The FCNR(B) window was closed on August 31, a month earlier than planned, following the strong response. 

ECB and OFCB Window Remains Open 

The ECB/OFCB facility will remain open until December 31. Inflows through these routes are expected to increase. Foreign currency brought into the banking system, followed by swaps with the RBI, added rupee liquidity to banks. 

A VRRR auction is a monetary policy tool used to absorb excess cash from the banking system. The RBI has conducted 32 VRRR auctions since August, including those held so far in September, with maturities ranging from overnight to 14 days. 

Read More: PNB MetLife Announces ₹1,210 Crore Annual Bonus For 5.51 Lakh Policyholders! 

Conclusion 

The September 7 operations absorbed more than ₹6 lakh crore through two VRRR auctions. The overnight auction received a larger share of bids than the 30-day operation. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.  

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.