The Reserve Bank of India conducted a 3-day Variable Rate Repo (VRR) auction on March 21, 2026, injecting ₹25,101 crore into the banking system at a cut-off rate of 5.26%, against a notified amount of ₹75,000 crore. This follows an earlier injection of ₹48,014 crore on March 17. The liquidity operations come amid tightening financial conditions as banks manage advance tax outflows and GST payments, compounded by elevated crude oil prices that are straining the current account. The RBI has been actively managing liquidity through a combination of VRR auctions, open market operations and forex swaps in recent weeks.
RBI Injects ₹25,101 Crore via 3-Day VRR Auction to Boost Banking System Liquidity
AQuick answer
RBI injected ₹25,101 crore via VRR auction on March 21 at 5.26% cut-off; follows ₹48,014 crore injection on March 17.
Key facts
- The RBI conducted a 3-day Variable Rate Repo (VRR) auction on March 21, 2026, injecting ₹25,101 crore at a cut-off rate of 5.26%.
- The notified amount was ₹75,000 crore, but only ₹25,101 crore was injected.
- An earlier injection of ₹48,014 crore was made on March 17.
- Liquidity tightening was caused by advance tax outflows, GST payments, and elevated crude oil prices.
- The RBI has been managing liquidity through VRR auctions, open market operations and forex swaps.
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What is a Variable Rate Repo (VRR) auction conducted by the RBI?
Explanation · Correct answer B
A Variable Rate Repo (VRR) auction is a liquidity injection tool used by the RBI where banks borrow funds at market-determined rates. In March 2026, RBI injected ₹25,101 crore through a 3-day VRR at 5.26% cut-off rate.
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Frequently asked questions
What was the cut-off rate in the RBI VRR auction on March 21, 2026?
The **Reserve Bank of India** conducted a **3-day Variable Rate Repo (VRR) auction** on March 21, 2026, at a cut-off rate of **5.26%**. Against a notified amount of **₹75,000 crore**, only **₹25,101 crore** was injected into the banking system, indicating subdued demand from banks.
How much liquidity did the RBI inject via VRR auctions in March 2026?
The RBI injected a total of approximately **₹73,115 crore** through two VRR auctions in March 2026: **₹48,014 crore on March 17** and **₹25,101 crore on March 21**. These operations were aimed at easing liquidity tightness caused by **advance tax outflows, GST payments, and elevated crude oil prices**.
Why did the RBI conduct a Variable Rate Repo auction in March 2026?
The RBI conducted VRR auctions in March 2026 to address **banking system liquidity tightness** caused by multiple simultaneous outflows: **advance tax payments, GST payments**, and pressure from **elevated crude oil prices above $112/barrel** straining the current account. VRR auctions allow banks to borrow short-term funds at market-determined rates.
What tools has the RBI used to manage liquidity in 2026?
The RBI has used a three-pronged approach to manage liquidity: - **Variable Rate Repo (VRR) auctions** for short-term injections - **Open Market Operations (OMOs)** for longer-term liquidity - **Forex swaps** to address currency and liquidity pressures In March 2026 alone, the RBI injected over **₹73,000 crore** through VRR auctions.
What was the notified amount versus actual injection in the RBI VRR auction on March 21, 2026?
In the RBI's **3-day VRR auction on March 21, 2026**, the notified amount was **₹75,000 crore** but the actual injection was only **₹25,101 crore** at a cut-off rate of **5.26%**. The shortfall indicates banks borrowed only one-third of the available liquidity, suggesting partial absorption of the liquidity deficit.
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