What happened
The RBI absorbed ₹2.90 lakh crore through two overnight VRRR auctions on 16 September 2026.
The Reserve Bank of India (RBI) absorbed ₹2.90 lakh crore from the banking system through two overnight Variable Rate Reverse Repo (VRRR) auctions on 16 September 2026 to suck excess liquidity.
In the first VRRR auction, the RBI received bids of ₹3,17,088 crore against a notified amount of ₹2,50,000 crore and accepted ₹2,50,025 crore. The auction cleared at a cut-off rate and weighted average rate of 5.24% per RBI's official press releases, with 66.9% partial acceptance applied to offers received at the cut-off rate.
In the second VRRR auction, the RBI notified ₹1,00,000 crore but received only ₹40,302 crore in bids, which it accepted in full. This auction also cleared at the same 5.24% cut-off and weighted average rate.
Liquidity in the banking system was estimated to be in surplus of around ₹9.85 lakh crore as on 15 September 2026, driven by heavy mobilisation of FCNR(B) deposits by banks and month-end government expenditure including salary and pension payments.
The RBI has been conducting various VRRR auctions since August 2026 to absorb surplus liquidity and align overnight money market rates to the repo rate. This absorption drive is part of a sustained multi-week liquidity-management effort, with the RBI having absorbed ₹3.93 lakh crore on 15 September 2026 and ₹6.02 lakh crore on 4 September 2026 via VRRR.
Background
The RBI has been conducting VRRR auctions since August 2026 to manage excess liquidity and align rates with the repo rate.
Why it matters for me
This absorption reduces excess liquidity, helping align overnight money market rates with the repo rate.
Money
General Public · Finance Professionals
Excess liquidity absorption helps stabilize short-term interest rates.
Work
Business Executives · Finance Professionals
Banks may see lower returns on idle funds due to liquidity absorption.
Daily Life
General Public
Indirect effect on loan rates for consumers over time.
What to remember
VRRR auctions remain a key tool for the RBI to manage liquidity and signal monetary policy stance.
RBI sucked ₹2.90 lakh crore excess liquidity via VRRR auctions on Sep 16.
Verified sources (2)
Result of the Overnight Variable Rate Reverse Repo (VRRR) auction held on September 16, 2026 (Press Release 2026-2027/1122)
↗RBI absorbs ₹2.90 lakh crore via two VRRR auctions amid huge surplus liquidity
↗Claims and linked sources
4 claimsThe RBI absorbed ₹2.90 lakh crore from the banking system through two overnight Variable Rate Reverse Repo (VRRR) auctions on 16 September 2026.
In the first VRRR auction, the RBI received bids of ₹3,17,088 crore against a notified amount of ₹2,50,000 crore and accepted ₹2,50,025 crore.
In the second VRRR auction, the RBI notified ₹1,00,000 crore but received only ₹40,302 crore in bids, which it accepted in full.
Both VRRR auctions cleared at a cut-off rate and weighted average rate of 5.24%, per RBI's official press releases.