RBI will conduct a 3-day Variable Rate Reverse Repo (VRRR) auction on October 12, 2026, for ₹2 lakh crore to absorb surplus liquidity. The auction window opens at 9:30 AM for one hour.
RBI to Absorb Liquidity via ₹2 Lakh Crore VRRR
On October 12, 2026, the Reserve Bank of India will conduct a 3-day Variable Rate Reverse Repo (VRRR) auction under the Liquidity Adjustment Facility (LAF), with a notified amount of ₹2,00,000 crore. The auction will be held between 9:30 AM and 10:00 AM, with reversal scheduled for October 15, 2026.
This move reflects the RBI’s active management of short-term liquidity conditions in the banking system. The VRRR mechanism allows the central bank to modulate excess liquidity dynamically by offering reverse repo contracts at variable rates, determined through competitive bidding. Such operations are critical during periods of high fiscal flows or temporary mismatches in government cash balances.
Market participants should anticipate tighter overnight rates during the auction period. Legal advisors to financial institutions must ensure that participation protocols align with the latest LAF operational guidelines issued by the RBI, including collateral eligibility and settlement timelines.
