 "RBI")
Banks submitted bids amounting to Rs 3 trillion, against the notified amount of Rs 1.25 trillion, at the 7-day Variable Rate Reverse Repo (VRR) auction conducted by the Reserve Bank of India (RBI) on Friday. Banks borrowed the amount at a weighted average rate of 6.74 per cent.
The deficit liquidity in the banking system widened to Rs 2.7 trillion on Thursday, according to data by the central bank.
In the preceding three VRR auctions, the central bank received a significant response, with banks submitting bids ranging between 2.5 to 3.2 times the bidding amounts due to tight liquidity conditions in the system. Liquidity has remained largely in deficit mode in the current quarter.
Banks had submitted bids worth Rs 1.6 trillion, around 3.2 times against the notified amount of Rs 50,000 crore, at the two-day VRR auction conducted by the RBI on Wednesday.
The central bank had conducted a VRR auction after six months on December 15.
