Overview

• Banks submitted bids totaling ₹1.70 lakh crore in the seven-day VRRR auction and the RBI accepted ₹1,00,010 crore at a 5.47% cut-off rate.
• Banking system liquidity surplus stood at around ₹4.04 lakh crore as of July 3 despite last week’s ₹84,975 crore absorption.
• The operations form part of the RBI’s framework to align overnight rates with its 5.5% repo rate by injecting or absorbing funds as needed.
• Excess liquidity has been driven by month-end government salary and pension payouts along with redemptions of government bonds and coupon payments.
• Effective January 1, 2026, the RBI will ban pre-payment charges on floating-rate loans for individuals and micro and small enterprises.