Mumbai, April 10 The Reserve Bank of India (RBI) will conduct a Variable Rate Reverse Repo (VRRR) auction worth Rs 2 lakh crore seven days from Friday.
"In view of the current surplus liquidity conditions, it has been decided to conduct a VRRR auction on Friday," the central bank said in a release.
The auction will take place between 2 pm and 2:30 pm, and the reversal of these funds will take place on April 17.
The banking system's liquidity has turned into a huge surplus due to the maturity of government securities (G-Secs).
G-Secs worth Rs 31,329 crore matured on April 8. Furthermore, maturities scheduled on April 12 and April 17, are worth Rs 86,403 crore and Rs 34,791 crore, respectively.
Currently, the liquidity in the banking system is expected to be in surplus of around Rs 4.55 lakh crore as of April 9, according to RBI data.
"Going forward, we will continue to be proactive and preemptive in liquidity management and ensure sufficient liquidity in the banking system to meet the productive needs of the economy," RBI Governor Sanjay Malhotra said after the monetary policy review earlier this week.