RBI · Government of India ·

Result of the Overnight Variable Rate Reverse Repo (VRRR) auction held on October 15, 2026

Distilled Policy Brief

  • The Reserve Bank of India conducted an overnight Variable Rate Reverse Repo (VRRR) auction to absorb liquidity from the banking system, with a notified amount of ₹50,000 crore.
  • Banks submitted total offers worth ₹9,562 crore, all of which were accepted at a cut-off and weighted average rate of 5.49 percent.
  • The undersubscription of the VRRR auction indicates current banking system liquidity conditions and short-term interest rate dynamics managed by the central bank.

🎯 Prelims High-Yield Examination Points

In an overnight Variable Rate Reverse Repo (VRRR) auction, the RBI absorbs liquidity from banks; unlike the fixed-rate reverse repo, the rate is discovered through the auction process.

⚖️ Mains Analytical & Syllabus Linkages

VRRR auctions are vital liquidity management tools used by the central bank to mop up excess liquidity, manage short-term interest rate volatility, and align the overnight call rate with the policy repo rate.

🎯 UPSC Prelims Practice Drill

Economy

With reference to the liquidity management operations of the Reserve Bank of India (RBI), consider the following statements: 1. Variable Rate Reverse Repo (VRRR) auctions are utilized by the RBI as a tool to absorb liquidity from the banking system. 2. An undersubscription in a VRRR auction occurs when the total value of offers received from banks is less than the notified amount specified by the RBI. Which of the statements given above is/are correct?

  • [A] 1 only
  • [B] 2 only
  • [C] Both 1 and 2
  • [D] Neither 1 nor 2
▶ Reveal Official Answer & Analytical Explanation
✓ Correct Option: [C] Both 1 and 2

Statement 1 is correct as the Reserve Bank of India conducts VRRR auctions specifically to absorb liquidity from the banking system. Statement 2 is correct as undersubscription occurs when the total offers submitted by banks (₹9,562 crore) fall short of the notified amount (₹50,000 crore), reflecting prevailing banking system liquidity conditions.

Tark High-Yield Question Bank ⚡ Practice Full Test in Testing Arena ↗

🏛️ Historical Twin PYQ Anchor (2021)

UPSC Prelims 2021

Consider the following statements regarding the "National Clean Air Programme (NCAP)": 1. It is implemented by the Ministry of Environment, Forest and Climate Change. 2. Central Pollution Control Board acts as the sole regulatory executive body.

Forensic Anchor: Cabinet Allocation of Business Rules & NCAP Framework
Examiner Trap Takeaway: UPSC swapped Central Pollution Control Board role with State Pollution Control Boards for state-level monitoring.

📚 Static Syllabus & Constitutional Linkages

Liquidity Adjustment Facility (LAF): Core monetary policy tool of the RBI comprising Repo, Reverse Repo, Marginal Standing Facility (MSF), and Variable Rate operations.