The Reserve Bank of India (RBI) on Tuesday injected Rs 48,014 crore in transient liquidity into the banking system through a seven-day variable rate repo (VRR) auction.

These funds were infused at a cut-off rate and weighted average rate of 5.26 per cent, according to the RBI's release.

The liquidity injected was much lower than the notified amount of Rs 1.50 lakh crore, despite the sharp drop in the surplus liquidity in the banking system on account of advance tax payments.

Under the VRR auction, the central bank auctions funds at variable interest rates for a short period, allowing banks to bid for a certain amount.

Liquidity in the banking system is expected to tighten further after the outflows towards payment of goods and services tax (GST), scheduled later this week.

Currently, liquidity in the banking system is estimated to be in a surplus of around Rs 75,483.63 crore as of March 16, which is sharply down from Rs 2.08 lakh crore as of March 15, before the advance tax payouts.

RBI has infused Rs 3.50 lakh crore of durable liquidity into the banking system through open market purchase (OMO) of government securities since January 2026.

In the last few months, the RBI has been infusing liquidity into the banking system to keep overnight rates under control.

This has led overnight rates to hover sharply below the repo rate.