The Central bank absorbed the entire amount that banks sought to park with it at a weighted average rate of 5.49%.
| Photo Credit:
FRANCIS MASCARENHAS
The Reserve Bank of India (RBI) on Friday received bids from Banks to deploy funds aggregating ₹1,71,795 crore at the 7-day variable rate reverse repo auction (VRRR) against the notified auction amount of ₹2 lakh crore.
The bidding at the auction indicates the amount of surplus liquidity with Banks, which at the last count was at ₹2.86 lakh crore as on July 31, 2025. The accumulation in liquidity comes in the backdrop of deposit growth surpassing credit growth.
The Central bank absorbed the entire amount that banks sought to park with it at a weighted average rate of 5.49 per cent .
The aim of the VRRR is to not only absorb surplus liquidity from the banking system but to also steer the overnight call money market rates towards the repo rate of 5.50 per cent. The weighted average call rate is the operating target of monetary policy.
After remaining in deficit since mid-December 2024, banking system liquidity conditions transitioned to surplus at the end of March 2025.
Published on August 1, 2025
