1 week ago
RBI Announces ₹7 Lakh Crore 30-Day VRRR Auction
The Reserve Bank of India plans to temporarily take excess money from banks.
It will do this through an auction on September 7.
The total amount involved is ₹7 lakh crore.
The money will normally stay with the RBI for 30 days, until October 7.
Banks can ask to get all or part of their money back earlier.
They must make the request through the RBI’s E-Kuber portal.
If approved, the money and earned interest will be credited on the next working day.
The RBI is using this operation while it reviews liquidity conditions in the banking system.
The RBI will conduct a ₹7 lakh crore VRRR auction with a 30-day tenor on Monday, September 7.
The auction will run from 9:30 am to 10 am, with funds scheduled to return on October 7.
The operation is intended to absorb surplus liquidity from the banking system.
Banks may request full or partial premature reversal of their bids before maturity.
The RBI said the auction’s operational guidelines will follow those used for VRRR operations in February 2020.
- Who
- The Reserve Bank of India and participating banks.
- What
- A ₹7 lakh crore variable rate reverse repo auction with a 30-day tenor.
- Where
- The auction will be conducted through the RBI’s systems, with premature reversal requests submitted via the E-Kuber portal during Mumbai working hours.
- When
- The auction is scheduled for Monday, September 7, from 9:30 am to 10 am; maturity is scheduled for October 7.
- Why
- To absorb surplus funds from the banking system as the RBI reviews prevailing and evolving liquidity conditions.
Key facts
- Auction amount
- ₹7 lakh crore
- Instrument
- Variable rate reverse repo (VRRR)
- Tenor
- 30 days
- Auction time
- 9:30 am to 10 am on September 7
- Scheduled maturity
- October 7
- Early withdrawal
- Banks may partially or fully reverse bids up to at least two working days before maturity
- Interest on reversal
- Banks will receive the principal plus interest accrued while funds were parked with the RBI
Sources
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