RBI to conduct Rs 7 lakh cr 30-day variable rate reverse repo auction on Sep 7
The Reserve Bank of India (RBI) will conduct a 30-day Variable Rate Reverse Repo (VRRR) auction worth Rs 7 lakh crore on September 7, 2026, to absorb excess liquidity in the banking system, which currently stands at over Rs 10.32 lakh crore. Participants will have the option of premature reversal through the E-Kuber portal, while the RBI continues to step…
- Why it matters
- Banks have more than 10.32 lakh crore rupees in excess reserves; this auction removes liquidity from the system to manage inflation pressure and stabilize money markets.
- Most affected
- Banks and financial institutions — Must park excess reserves at RBI, reducing lending capacity and market liquidity temporarily.
- Likely next
- Whether the auction attracts full subscription and at what rate participants bid on September 7.
Also reported by: NDTV