RBI to lend banks up to ₹1 lakh crore for 7 days, 19 Oct
RBI switched from taking cash from banks to lending it: a 7-day Variable Rate Repo for up to ₹1,00,000 crore on 19 October.
Official title: RBI to conduct 7-day Variable Rate Repo (VRR) auction under LAF on October 19, 2026 · Press Release 2026-2027/1345
What happened
RBI will hold a 7-day Variable Rate Repo (VRR) auction on Monday, 19 October 2026, between 9:30 and 10:00 AM. It will lend banks up to ₹1,00,000 crore (₹1 lakh crore), to be repaid on Monday, 26 October. The release says the decision follows a review of "current and evolving liquidity conditions in the near term".
This is a change of direction. Until 15 October, RBI was running cash-absorbing VRRR auctions. Now it is offering cash. That suggests cash in the banking system has become tight. The release does not say why.
What it means for you
No direct effect on your savings, loans or EMIs. It is RBI topping up the cash that banks need to run day to day.
What it means for businesses
Banks short of cash can borrow from RBI against safe securities. If cash stays tight, short-term borrowing rates in the money market can drift up, which can matter for lenders and companies that borrow short term.
Links in this release, explained
- RBI press release 2021-2022/1572 (20 January 2022): operating guidelines for VRR auctions
The earlier RBI notice that sets the working rules for Variable Rate Repo auctions. The release says the same rules apply. Useful only for technical detail.
www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=53127
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.