RBI Absorbs ₹75,026 Crore Through Overnight VRRR Auction Amid ₹4.45 Trillion Liquidity Surplus

The Reserve Bank of India absorbed ₹75,026 crore from the banking system through an overnight variable rate reverse repo (VRRR) auction on Wednesday, amid surplus liquidity, according to a Business Standard news report. 

The RBI had set a notified amount of ₹75,000 crore for the auction. Banks submitted bids totalling ₹87,993 crore, while the central bank accepted ₹75,026 crore. 

VRRR Auction Clears at 5.24% 

The accepted bids were settled at a cut-off rate of 5.24%. The weighted average rate for the auction was also 5.24%. 

The RBI has been conducting VRRR auctions since last month to take surplus funds out of the banking system. The operations are also aimed at keeping overnight money market rates aligned with the repo rate. 

Liquidity Surplus at ₹4.45 Trillion 

According to RBI data, liquidity in the banking system stood at around ₹4.45 trillion in surplus as of September 22, 2026. 

The surplus was partly linked to banks raising FCNR(B) deposits. The foreign currency brought into the system was subsequently swapped with the RBI, providing banks with rupee liquidity. 

Government spending towards the end of the month also added to system liquidity. Payments related to salaries and pensions were among the factors contributing to the increase. 

OMO Sales Withdraw ₹75,000 Crore 

The RBI has also been using open market operation (OMO) sales to manage liquidity. It sold government securities worth ₹50,000 crore on September 17 and another ₹25,000 crore on September 21, 2026. 

In an OMO sale, banks and other investors purchase government securities from the RBI, reducing rupee liquidity in the banking system. 

Final ₹25,000 Crore OMO Tranche Due 

The RBI had announced OMO sales totalling ₹1 trillion in three tranches. After the September 17 and September 21 sales, the remaining ₹25,000 crore tranche is scheduled for September 28, 2026. 

Read More: UPI Merchant Transactions Largely Unaffected by GST on MDR, Confirms NPCI! 

Conclusion  

The latest VRRR auction comes as the banking system continues to hold a sizeable liquidity surplus, with the RBI using multiple operations to withdraw excess funds. 

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