RBI to Conduct ₹7 Lakh Crore 30-Day VRRR Auction on September 7 to Manage Banking System Liquidity

National News (05 September 2026): The Reserve Bank of India (RBI) has announced that it will conduct a 30-day Variable Rate Reverse Repo (VRRR) auction worth ₹7 lakh crore on Monday, September 7, 2026, as part of its ongoing efforts to manage liquidity conditions in the banking system.

The decision follows a review of the prevailing liquidity situation as well as emerging liquidity requirements. Under the facility, eligible participants will be able to park funds with the RBI for a specified period through the variable-rate reverse repo mechanism.

₹7 Lakh Crore VRRR Auction Scheduled for September 7

According to the RBI’s latest press release, the auction will have a notified amount of ₹7,00,000 crore, with a tenor of 30 days.

The auction window will remain open from 9:30 AM to 10:00 AM on September 7, 2026. The amount accepted through the auction is scheduled for reversal on October 7, 2026 (Wednesday).

The central bank said the auction will be conducted under the Liquidity Adjustment Facility (LAF).

ParticularDetailsAuctionVariable Rate Reverse Repo (VRRR)Amount₹7,00,000 croreTenor30 daysAuction DateSeptember 7, 2026Auction Timing9:30 AM – 10:00 AMReversal DateOctober 7, 2026FacilityLiquidity Adjustment Facility (LAF)

RBI Sets Operational Rules for VRRR Auction

The RBI said that the operational guidelines applicable to the auction will remain the same as those specified in its earlier press release dated February 13, 2020. Participants will also have the facility to request premature reversal of the amount placed through the VRRR auction, subject to the conditions prescribed by the central bank.

Requests for premature reversal can be submitted only through the E-Kuber portal between 9:00 AM and 5:00 PM on working days in Mumbai. The RBI has also clarified that participants will be permitted to seek a partial reversal of a bid, providing greater flexibility in managing their funds.

Premature Reversal Requests Must Be Made in Advance

Once a participant submits a request for premature reversal through the E-Kuber portal, the request must also be communicated via email to the Financial Markets Operations Department of the RBI. The settlement of a premature reversal will take place at the start of the day on the next working day after the request is submitted.

However, participants cannot seek premature reversal at the last moment. The RBI has specified that such requests must be submitted at least two working days before the original reversal date.

What Happens on the Scheduled Reversal Date?

On October 7, 2026, the participant’s current account with the RBI will be credited with the principal amount along with accrued interest for the period during which the funds were lent under the reverse repo arrangement. At the same time, the securities provided as collateral in connection with the transaction will be debited from the participant’s reverse repo constituent SGL account.

The mechanism allows the RBI to influence liquidity available within the financial system while providing participating institutions with a structured avenue for parking surplus funds.

RBI’s Liquidity Management Move

The announcement comes as the RBI continues to monitor liquidity conditions in the financial system. Through instruments such as VRRR auctions, the central bank can absorb surplus liquidity from the banking system for a predetermined period.

The ₹7 lakh crore auction, therefore, represents a significant liquidity-management operation, with participating institutions required to submit bids during the designated auction window on September 7. The RBI issued the announcement under Press Release No. 2026-2027/1050. The release was signed by Ajit Prasad, Deputy General Manager (Communications).

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