The Reserve Bank of India performed two variable REPO (VRR) auctions on Friday on Friday to infuse liquidity in the banking system. The liquidity surplus has shrunk to £ 72,774 crore from 18 September due to larger than expected tax outflows.
In the first VRR auction of six days tenor, which tried to pump £ 1 lakh crore into the banking system, the RBI accepted bids from banks that collected £ 59,967 Crore. It accepted all bids with a weighted average speed of 5.51 percent.
In the second VRR auction of three-day tenor, the RBI tried to inject liquidity that aggregated £ 50,000. However, the bidding’s answer was lukewarm. They offer to draw money that only £ 390 crore aggregate. The plant accepted the bids with a weighted average speed of 5.52 percent.
The treasury head of a bank of the private sector said that RBI wants to maintain a surplus of liquidity of £ 1.50-2 Lakh Crore via VRR auctions to ensure the transfer of the reduction of the repo rate to loan rates.
Furthermore, the reduction of the cash reserve ratio, which is carried out in four equal tranches of 25 basic points, each will contribute to the liquidity in the system from 6 September, 4 October, November 4, November 1 and November 29, 2025.
The reduction of the CRR would release the primary liquidity of approximately £ 2.5 Lakh Crore to the banking system by December 2025.
In the meantime, the RBI said on an evaluation of the current and evolving liquidity conditions, it has decided to carry out an overnight stay VRR auction on Monday, so that £ 1 Lakh Crore was aggregated.
Published on September 19, 2025
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