Reserve Bank of India Conducted ₹7 Lakh Crore Reverse Repo Auction

RBI Absorbs Liquidity

The Reserve Bank of India (RBI) conducted a variable rate reverse repo (VRRR) auction on September 7, 2026. This operation absorbed ₹7,00,000 crore from the Indian banking system. A VRRR auction removes excess cash from banks by temporarily exchanging government securities for funds. Banks then return the securities and receive their funds plus interest. This particular auction had a 30-day tenor, demonstrating RBI's ongoing liquidity management efforts.

Premature Reversal Process

Participants could request premature reversal of their lent amounts. This required placing requests through the E-Kuber portal during Mumbai working hours, from 9:00 to 17:00. Partial bid reversals were permitted. An email notification to the Financial Markets Operations Department also confirmed the request.

Settlement for premature reversals occurred at the start of the next working day. The participant's current account with RBI received principal and accrued interest.

Market Impact and Controls

The RBI debited securities offered as collateral from the participant’s reverse repo constituent SGL account. Participants needed to place premature reversal requests at least two working days before the original reversal date. This auction demonstrates the RBI's continuous efforts in liquidity management.

Such operations are vital for controlling short-term interest rates and the money supply within India’s financial markets. This supports overall financial stability.