RBI injects ₹1.41 lakh crore into banking system via 7-day VRR auction

The central bank's massive liquidity operation aims to offset a sharp swing from surplus to deficit in overnight balances, easing pressure on short-term funding costs.

By Handelsavisen Newsroom · Automated 2026-06-23 07:10 UTC · 1 min read

The Reserve Bank of India (RBI) has injected ₹1.41 lakh crore ($16.8 billion) into the banking system through a 7-day Variable Rate Reverse Repo (VRR) auction, according to Hindu Businessline.

The move comes as the central bank seeks to stabilize liquidity conditions following a rapid deterioration in overnight balances.

Liquidity in the banking system swung sharply from a surplus of ₹30,685.11 crore on June 21 to a deficit of ₹19,971.89 crore by June 22.

The RBI’s large-scale injection is designed to bridge this gap and prevent upward pressure on short-term interest rates, which can ripple through to broader market yields and corporate borrowing costs.

The VRR auction mechanism allows the RBI to absorb or inject liquidity at market-determined rates, providing a more flexible tool than fixed-rate operations.

By targeting a 7-day tenor, the central bank is addressing immediate funding needs while maintaining control over the duration of the liquidity support.