After reviewing near-term liquidity conditions, the Reserve Bank of India will conduct a 4-day Variable Rate Repo (VRR) auction under the Liquidity Adjustment Facility on October 26, 2026. The move comes with a notified amount of INR 1.5 lakh crore to manage short-term funding conditions, with the reversal scheduled for October 30, 2026.
Highlights
- RBI to conduct a 4-day VRR auction worth INR 150,000 crore on October 26, 2026, from 9:30 a.m. to 10:00 a.m.
- The auction will be reversed on Friday, October 30, 2026, and the operational guidelines will remain the same as those in the January 20, 2022 press release.
- Through this auction, the RBI aims to improve the banking system’s liquidity position and the availability of short-term funding.
This article was translated from the original. Read the original version by our correspondent here.
Auction details and timeline
According to the RBI press release, the VRR auction will be held on Monday, October 26, 2026, between 9:30 a.m. and 10:00 a.m. The notified amount is INR 150,000 crore, and the auction tenor is four days.The central bank said the operation will be reversed on Friday, October 30, 2026. The operational guidelines for the auction will remain the same as those set out in Reserve Bank Press Release 2021-2022/1572 dated January 20, 2022.
Impact on the banking system and short-term funding
The move comes as the RBI monitors changing near-term liquidity conditions and seeks to adjust the availability of short-term funds in the banking system. VRR auctions generally provide banks with a way to borrow funds from the central bank for a specified period, helping stabilize money market conditions.The press release is signed by Ajit Prasad, Deputy General Manager, Communications. The announcement was issued under Press Release No. 2026-2027/1383.
Our earlier report highlighted the sharp increase in states’ market borrowings for Q3 FY2027, estimating gross SGS issuance at INR 3.6 lakh crore and net issuance after redemptions at INR 2.3 lakh crore, according to the RBI’s auction calendar. The article also noted that Maharashtra, West Bengal, and Haryana account for a large share of the additional borrowing, while several states have adopted the Benchmark Issuance Strategy (BIS) to standardize issuance.
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