RBI to Conduct Overnight VRRR Auction on 28 September 2026

What happened

The Reserve Bank of India announced an overnight Variable Rate Reverse Repo (VRRR) auction under the Liquidity Adjustment Facility (LAF) for Monday, 28 September 2026.

Notified amount: ₹2,00,000 crore; tenor: 1 day; bidding window 09:30–10:00 IST; reversal on 29 September 2026. Operational guidelines follow RBI’s 13 February 2020 press release on VRRR auctions.

Static revision

• Reverse repo / VRRR: RBI absorbs liquidity from the banking system
• Repo / VRR: RBI injects liquidity
• LAF is RBI’s primary day-to-day liquidity management toolkit
• RBI HQ: Mumbai; established 1935; nationalised 1949

Banking and RBI Grade B aspirants should distinguish fixed-rate reverse repo corridor tools from variable-rate auctions used to fine-tune surplus liquidity.

For banking exams, remember that VRRR is used when the system is in surplus and RBI wants to suck out durable excess liquidity without changing the policy repo rate corridor permanently. Candidates should also revise the difference between the standing deposit facility (SDF) and auction-based VRRR tools when reading the Monetary Policy Report.

Practice MCQs

1. What does VRRR stand for in RBI liquidity operations?

   (A) Variable Rate Repo Return
   (B) Variable Rate Reverse Repo
   (C) Voluntary Reserve Ratio Rule
   (D) Variable Risk Rating Report

   Answer: (B) – Variable Rate Reverse Repo under LAF.

2. The notified amount of the 28 September 2026 overnight VRRR was:

   (A) ₹50,000 crore
   (B) ₹1,00,000 crore
   (C) ₹2,00,000 crore
   (D) ₹5,00,000 crore

   Answer: (C) – RBI press release notified ₹2 lakh crore.

3. VRRR operations primarily help RBI to:

   (A) Print more currency notes
   (B) Absorb surplus liquidity
   (C) Fix MSP for crops
   (D) Appoint bank CMDs

   Answer: (B) – Reverse repo / VRRR absorbs liquidity.

Source: RBI Press Release 2026-2027/1195 dated 25 September 2026 (prid 63673).