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Banks park only ₹37,558 crore of RBI’s ₹2 lakh crore reverse repo; ₹1.5 lakh crore overnight drain and ₹25,000 crore bond sale run this morning

The RBI offered banks a three-day home for up to ₹2 lakh crore on Monday. They put in less than a fifth of that. Friday’s ₹1.4 lakh crore three-day deposit came back the same morning, so far less cash was parked with the central bank going into a week of tighter reserve rules. Today the RBI tries again overnight and sells ₹25,000 crore of bonds at the same time.

Capital Chronicle Desk~4 minDual-layer

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RBI’s reverse-repo drains, as published (₹ crore):

OperationNotifiedAcceptedCut-off / WARReverses
3-day VRRR, Mon 12 Oct2,00,00037,558 (all offers taken)5.49% / 5.49%Thu 15 Oct
Overnight VRRR, Tue 13 Oct1,50,000result after 10 a.m.—Wed 14 Oct
3-day VRRR, Fri 9 Oct1,50,0001,39,8475.49%Mon 12 Oct
10-day VRRR, Fri 9 Oct1,50,00018,1705.49%Mon 19 Oct
29-day VRRR, Thu 8 Oct2,00,00079,6555.49%—

Also today: the RBI’s OMO sale of up to ₹25,000 crore of government bonds (six securities, 2030–2034), bids 9:30–10:30 a.m., settlement by noon Wed 14 Oct. Results were not out when this story was filed; we will not guess the cut-offs.

Takeaway: banks took up only about 18.8% of Monday’s offer (Capital Chronicle arithmetic) — a sign that spare cash is thinner than the RBI’s ₹2 lakh crore target assumed, even before the 99% daily CRR floor starts on 16 Oct. Not investment advice.

Analysis

What a reverse repo is doing here

In a variable rate reverse repo (VRRR), banks lend surplus cash to the RBI for a fixed number of days and bid the rate they want. The RBI uses it to soak up cash it thinks is sloshing around, so that overnight rates stay close to the 5.50% repo rate set on 7 Oct. Monday’s cut-off of 5.49% sits just 1 basis point below that.

Less than a fifth filled

On Monday the RBI notified ₹2,00,000 crore for three days. Offers came to ₹37,558 crore, and the RBI accepted all of it at a cut-off and weighted average rate of 5.49% (RBI press release 2026-2027/1308).

The same morning, Friday’s three-day VRRR of ₹1,39,847 crore matured and came back to banks. Netting the two, roughly ₹1,02,289 crore less was sitting in three-day reverse repo after Monday than after Friday (Capital Chronicle arithmetic on RBI results).

Until Monday, the pattern since the hike was that short windows filled and longer ones did not: Friday’s 3-day drew about 93% of its notified amount, the 10-day about 12% and Thursday’s 29-day about 40% (all Capital Chronicle arithmetic; Friday’s story, Monday’s liquidity story). Monday broke it: the same three-day tenor fell from about 93% to about 18.8%.

From the three term operations above that are still outstanding — 29-day ₹79,655 crore, 10-day ₹18,170 crore and Monday’s 3-day ₹37,558 crore — about ₹1,35,383 crore is parked with the RBI (Capital Chronicle arithmetic; it excludes any other operations, and the RBI’s daily Money Market Operations release is the official tally).

Why banks may be holding cash back

The RBI does not give reasons, and neither do banks, so treat these as the known pressures rather than a verdict:

  1. The CRR floor. From the fortnight starting 16 Oct, banks must keep 99% of their cash reserve requirement with the RBI every day, up from 90% (circular story). On 8 Oct, banks’ balances were about 96.7% of the average daily requirement (Capital Chronicle arithmetic on RBI data), so many will want a cushion.
  2. Today’s bond sale. Banks that win bonds in the ₹25,000 crore OMO must pay by noon Wednesday.
  3. Loans running ahead of deposits. At 30 Sep, bank credit was up 19.4% a year and deposits 17.8% (RBI data).
  4. The rupee rules. The weekend FX package includes a 20% cash reserve on large dollar-buying hedges, parked with the RBI (rupee story).

Today’s two windows overlap

The overnight VRRR (₹1,50,000 crore, 9:30–10:00 a.m.) and the OMO sale (9:30–10:30 a.m.) both run this morning. The overnight money comes back on Wednesday, the same day the OMO buyers must pay. So the overnight result will show how much cash banks can spare for just one night, and the OMO cut-offs will show what yield they want for buying longer bonds.

What to watch

  1. Overnight VRRR result (after 10 a.m.): accepted amount vs ₹1,50,000 crore
  2. OMO sale result: amount sold vs ₹25,000 crore, and cut-off yields for each of the six bonds
  3. RBI Money Market Operations release for 12 Oct: overnight call rate vs the 5.50% repo
  4. ₹23,000 crore T-bill auction on Wed 14 Oct

Sources

Not investment advice. RBI results for today’s operations were pending at filing; this story will be updated with official numbers only.

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Not personalized financial advice. Corrections: corrections@capitalchronicle.news