RBI to conduct Rs 7 lakh cr 30-day variable rate reverse repo auction on Sep 7

Mumbai: The Reserve Bank of India (RBI) on Friday said it will conduct a 30-day variable rate reverse repo (VRRR) auction for a notified amount of Rs 7 lakh crore on September 7, according to the notification.

The auction will take place on September 7, between 9.30 am and 10.00 am. The reversal of these funds will take place on October 7.

“On a review of the current and evolving liquidity conditions, it has been decided to conduct a Variable Rate Reverse Repo (VRRR) auction on Monday, September 7, 2026,” the RBI said in a release.

The excess liquidity in the banking system is estimated to be in surplus of around Rs 10.32 lakh crore as on September 3.

The central bank also said participants will have the option of premature reversal of the amount lent, including partial reversal, the RBI said.

Requests for premature reversal can be placed through the E-Kuber portal during 0900-1700 hours on working days in Mumbai and must also be intimated by email to the Financial Markets Operations Department.

Settlement of premature reversal will take place at the start of the next working day following the date of the request. Participants can seek premature reversal at least two working days before the original reversal date.

On the scheduled reversal date, the participant’s current account with the RBI will be credited with the principal amount and accrued interest for the lending period, while the securities offered as collateral by the RBI will be debited from the participant’s reverse repo constituent SGL account.

Today, the RBI absorbed over Rs 6.02 lakh crore from the banking system through two VRRR auctions as surplus liquidity remained at a record high.

The RBI has stepped up liquidity absorption operations as the banking system has been flooded with funds following large inflows through the special FCNR(B) deposit scheme.

The RBI’s special forex measures mobilised USD 136.38 billion by August 31, including USD 127.23 billion through FCNR(B) deposits, USD 5.26 billion through OFCBs and USD 3.89 billion via ECBs, according to the RBI’s data.

The FCNR(B) window was closed a month early on August 31 due to the strong response, while the ECB/OFCB facility remains open till December 31 and inflows through these routes are expected to pick up.

The mobilisation brought foreign currency into the banking system, while the subsequent swaps with the RBI provided rupee liquidity to banks.

In order to align with the repo rate, the central bank 32 VRRR auctions between August and so far in September, with a maturity ranging between overnight and 14 days.