New Student User: Use Code HELLO

Claim Offer

RBI Discontinued Daily VRR Auctions Amid Banking Liquidity Surplus

Published on June 14, 2025
Current Context: The Reserve Bank of India (RBI) discontinued daily Variable Rate Repo (VRR) auctions on June 11, 2025, due to surplus liquidity in the banking system, estimated at ₹2.75–3 lakh crore.
RBI Discontinued Daily VRR Auctions Amid Banking Liquidity Surplus
Key Highlights:
  • VRR auctions, introd
  • uced on January 16, 2025, aimed to ease short-term liquidity tightness.
  • Recent auctions saw low demand, with banks borrowing only ₹3,711 crore on June 9 and ₹3,853 crore on June 10 against a ₹25,000 crore limit.
  • The RBI’s 100 bps Cash Reserve Ratio (CRR) cut is expected to release ₹2.5 lakh crore into the system.
  • While daily VRR auctions end, the RBI will continue 14-day VRR auctions, Open Market Operations (OMO), and Standing Deposit Facility (SDF) to manage liquidity.

Question:

Q.1 Why did the Reserve Bank of India (RBI) discontinue daily Variable Rate Repo (VRR) auctions on June 11, 2025?
a) Due to rising inflation
b) Due to surplus liquidity in the banking system
c) Because of high demand from banks
d) To introduce a new monetary policy tool

Answer: b) The Reserve Bank of India (RBI) discontinued daily Variable Rate Repo (VRR) auctions on June 11, 2025, due to surplus liquidity in the banking system, estimated at ₹2.75–3 lakh crore.

ebook store

About Me

Ramandeep Singh

Ramandeep Singh - Educator

I'm Ramandeep Singh, your guide to banking and insurance exams. With 14 years of experience and over 5000 successful selections, I understand the path to success firsthand, having transitioned from Dena Bank and SBI. I'm passionate about helping you achieve your banking and insurance dreams.

  • Follow me:
Close Menu
Close Menu