RBI Announces ₹1.75 Lakh Crore Two-Day VRRR Auction for August 25 as Liquidity Absorption Continues
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The Reserve Bank of India has announced a ₹1.75 lakh crore Variable Rate Reverse Repo auction to be conducted on August 25, 2026. The operation will have a two-day tenor, with the bidding window scheduled from 9:30 AM to 10:00 AM and reversal on August 27, 2026.
What RBI has announced
RBI said the auction is being conducted after a review of current and evolving liquidity conditions. A Variable Rate Reverse Repo allows the central bank to absorb surplus liquidity from the banking system for a specified period, with participating institutions placing bids at the auction.
The notified amount for the August 25 operation is ₹1,75,000 crore. The tenor is two days. RBI has also stated that the operational guidelines already prescribed for such auctions under its February 13, 2020 framework will continue to apply.
Why this matters for banks and treasury teams
The auction comes amid repeated liquidity-absorption operations by the central bank. On August 24, RBI conducted both seven-day and overnight VRRR operations. The seven-day auction had a notified amount of ₹2.50 lakh crore and accepted ₹91,980 crore at a cut-off and weighted-average rate of 5.24%. The overnight auction notified ₹1.50 lakh crore and accepted ₹49,206 crore, also at 5.24%.
The new two-day operation therefore gives banks another avenue to place surplus funds with RBI while allowing the central bank to fine-tune liquidity conditions across a short tenor. Treasury desks, money-market participants and finance professionals should track both the amount accepted and the resulting cut-off rate because those figures indicate the system's appetite for liquidity absorption at prevailing short-term rates.
Key details to track on August 25
- Notified amount: ₹1.75 lakh crore.
- Tenor: Two days.
- Bidding window: 9:30 AM to 10:00 AM on August 25, 2026.
- Reversal date: August 27, 2026.
- Framework: Existing RBI operational guidelines for VRRR auctions continue to apply.
For banking and treasury professionals, the important point is not only the headline ₹1.75 lakh crore size but also the sequence of liquidity-absorption operations around it. The auction result will show how much surplus liquidity banks are willing to park with RBI for two days and at what rate. That result will be useful in assessing very short-term liquidity conditions and money-market pricing.
Useful official links
RBI to conduct 2-day Variable Rate Reverse Repo (VRRR) auction under LAF on August 25, 2026
Key takeaway
The fresh RBI liquidity operation affects banks, treasury teams, money-market participants and finance professionals tracking short-term system liquidity.
