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Thursday, December 04, 2025 | 08:31 AM ISTहिंदी में पढें
Banking system liquidity surplus tops ₹4 trillion; strong VRRR demand
Liquidity jumps on government spending and surplus transfer; RBI gets ₹1.7 tn bids at 7-day VRRR, with cut-off at 5.47%; experts see preference for shorter operations
 "The Reserve Bank of India's (RBI's) decision to cut the cash reserve ratio (CRR) by 50 basis points, injecting liquidity of Rs 1.16 trillion into the banking system, is expected to reduce costs for banks and provide a much-needed boost to credit offt")
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VRRR auctions are aimed at sucking out excess liquidity from the banking system and aligning overnight rates with the repo rate.
The liquidity surplus in the banking system, measured by lenders parking funds in the Reserve Bank of India’s (RBI’s) liquidity adjustment facility (LAF), surged to ₹4.04 trillion on Thursday, highest since May 19, 2022.
The spike is mainly due to increased government spending, following a record ₹2.69 trillion surplus transfer by the central bank in May.
During the seven-day Variable Rate Reverse Repo (VRRR) auction conducted on Thursday, the RBI received bids worth around ₹1.7 trillion against a notified amount of ₹1 trillion. The central bank accepted ₹1 trillion at a cut-off rate of 5.47 per cent.
The bidding was
Topics : banking liquidity RBI repo rate
