RBI Injects ₹72,300 Crore Through VRR Auctions as Liquidity Surplus Drops

The Reserve Bank of India injected ₹72,300 crore into the banking system on Wednesday through two Variable Rate Repo auctions to stabilize short-term liquidity. The first auction provided ₹50,016 crore at a cut-off rate of 5.26 percent, while the second infused ₹22,284 crore. The move addressed a sharp decline in surplus liquidity caused by advance tax-related outflows.

Surplus liquidity in the banking system fell significantly from ₹1.51 lakh crore on June 15 to around ₹23,881 crore on June 16, primarily due to advance tax payments by companies. Banking experts anticipate continued liquidity pressure from upcoming GST payments. Experts suggest the RBI may conduct additional VRR auctions if required to maintain adequate liquidity and control overnight borrowing rates.