RBI to borrow up to ₹2 lakh crore from banks for one day, 8 Oct
RBI announced a second one-day cash-absorbing auction on 8 October, offering to take up to ₹2,00,000 crore from banks overnight.
Official title: RBI to conduct Overnight Variable Rate Reverse Repo (VRRR) auction under LAF on October 08, 2026 · Press Release 2026-2027/1278
What happened
RBI will hold a Variable Rate Reverse Repo (VRRR) auction on Thursday, 8 October 2026, between 11:00 and 11:30 AM. It wants to borrow up to ₹2,00,000 crore (₹2 lakh crore) from banks for one day, to be returned on Friday, 9 October. The release calls it a "second" VRRR auction, after a review of "current and evolving liquidity conditions".
A VRRR means banks hold more cash than they need, and RBI is taking some of it in for a short time. The rules of the auction are unchanged from the 2020 notice.
What it means for you
No direct effect on your savings, loans or EMIs. It is a day-to-day cash management step between RBI and banks.
What it means for businesses
Banks that hold surplus cash can earn interest by lending it to RBI for this period. For other businesses the effect is indirect, through short-term interest rates in the money market.
Links in this release, explained
- RBI press release 2019-2020/1947 (13 February 2020): operating guidelines for VRRR auctions
The earlier RBI notice that sets the working rules for these auctions, such as who can bid and how bids are settled. The release says those rules are unchanged. Useful only if you want the technical detail.
www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=49399
Read the original
Press release on rbi.org.in ↗ Official PDF ↗
This explainer simplifies the official text. If anything here differs from the RBI's release, the release is right.