The Reserve Bank of India (RBI) on Wednesday said it will be conducting an overnight variable rate repo auction under the liquidity adjustment facility (LAF) for an amount of Rs 50,000 crore on Thursday (September 22).
"On a review of current liquidity conditions, the Reserve Bank of India has decided to conduct a Variable Rate Repo auction on September 22," the central bank said in a release on September 21.
The auction will begin between 10.30-11 am on September 22, 2022, and the tenure is one day. The date of reversal is on September 23, 2022 (Friday), RBI said.
The RBI has been rebalancing the surplus liquidity in the system by shifting it out of the fixed rate overnight reverse repo window into the variable rate reverse repo (VRRR) auctions of longer maturity.
As per the operational guidelines, the auction will be conducted on CBS (e-Kuber) platform and the minimum bid amount for the auction would be Rs 1 crore and multiples thereof. The allotment would be in multiples of Rs 1 crore, the RBI said.
The apex bank said banks would be required to place their bids in percentage terms up to two decimal places and banks can place multiple bids. Successful bids will get accepted at their respective bid rates.
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Once the bidding time is over, all the bids would be arranged in descending order of the rates quoted and the cut-off rate would be arrived at the rate corresponding to the notified amount of the auction.
Successful bidders would be those who have placed their bids at or above the cut-off rate. All bids lower than the cut-off rate would be rejected, it said.
