RBI to Conduct Overnight VRRR Auction under LAF on September 28 2026
The Reserve Bank of India (RBI) has officially announced that it will conduct an overnight Variable Rate Reverse Repo (VRRR) auction under the Liquidity Adjustment Facility (LAF). This decision comes following a thorough review of the current and evolving liquidity conditions prevailing within the financial markets. Market participants and financial institutions should take note of the specific schedules, notified amounts, and operational guidelines established for this upcoming monetary policy operation.
Overview of the VRRR Auction
The central bank frequently utilizes liquidity management tools such as Variable Rate Reverse Repo auctions to absorb excess liquidity from the banking system. Based on recent assessments of market liquidity, the upcoming auction is scheduled to take place on Monday, September 28, 2026. A notified amount of ₹2,00,000 crore will be up for absorption under a one-day tenor window. Financial institutions participating in the LAF framework are advised to prepare their bids in accordance with the specified timing and operational parameters.
Key Details Table
| Parameter | Details |
|---|---|
| Organization | Reserve Bank of India (RBI) |
| Announcement Type | Press Release (2026-2027/1195) |
| Event | Overnight Variable Rate Reverse Repo (VRRR) Auction |
| Liquidity Facility | Liquidity Adjustment Facility (LAF) |
| Auction Date | September 28, 2026 |
| Notified Amount | ₹2,00,000 crore |
| Tenor | 1 Day |
| Window Timing | 09:30 AM to 10:00 AM |
| Date of Reversal | September 29, 2026 |
Important Dates and Schedule
The schedule for the liquidity operation is tightly structured to ensure smooth settlement and reversal. The primary auction event occurs on the last Monday of September 2026, with the reversal scheduled immediately for the following day.
| Event Description | Date |
|---|---|
| Auction Date | September 28, 2026 |
| Reversal Date | September 29, 2026 |
Operational Guidelines and Regulations
The operational mechanics and guidelines governing this specific auction remain consistent with previously established protocols. The Reserve Bank has confirmed that the operational guidelines outlined in its earlier Press Release dated February 13, 2020 (Reference No. 2019-2020/1947), will continue to apply without any modifications. Eligible market participants must adhere strictly to these documented procedures while submitting their bids during the designated window of 09:30 AM to 10:00 AM on the auction day.
What Affected Entities Should Do Next
Commercial banks and eligible financial entities operating within the Indian banking ecosystem should evaluate their liquidity positions ahead of the auction. Entities seeking to park surplus funds via the LAF window need to ensure readiness of their systems to meet the 09:30 AM to 10:00 AM bidding window on September 28, 2026. For further official updates, participants can visit the official Reserve Bank of India website at https://www.rbi.org.in.
Frequently Asked Questions
When is the RBI conducting the VRRR auction?
The RBI is conducting the Variable Rate Reverse Repo auction on Monday, September 28, 2026.
What is the notified amount for the VRRR auction?
The notified amount for the auction is ₹2,00,000 crore.
What is the tenor and window timing for the auction?
The tenor is 1 day, and the window timing is from 09:30 AM to 10:00 AM.
When is the date of reversal for the auction?
The date of reversal is scheduled for Tuesday, September 29, 2026.
Which guidelines apply to this VRRR auction?
The operational guidelines given in the Reserve Bank's Press Release dated February 13, 2020, remain the same and apply to this auction.
Official Links
Details are compiled from official notices. Always confirm eligibility, dates and fees on the official website before applying.