RBI Injects Short-term Liquidity Amidst Uneven Banking Landscape

The Reserve Bank of India (RBI) has undertaken a strategic move to ease liquidity constraints by injecting Rs 25,101 crore into the banking system. This injection was facilitated through a three-day variable rate repo (VRR) auction, contrasting the notified amount of Rs 75,000 crore.

Despite a sharp decline in surplus liquidity due to advance tax payments, the banking sector witnessed a lower subscription in the VRR auction. This indicates an uneven distribution of liquidity, as banks now show a tendency to place larger funds in the Standing Deposit Facility.

As per March 19 estimates, liquidity in the banking system remains in surplus by Rs 16,875.36 crore. This action follows a recent Rs 48,014 crore liquidity infusion via a seven-day VRR by the RBI, which has injected Rs 3.50 lakh crore into the system through open market operations since January 2026.