India, Sept. 16 -- The Reserve Bank of India (RBI) on Tuesday absorbed Rs 3,93,352 crore through a Variable Rate Reverse Repo (VRRR) auction amid huge surplus liquidity in the banking system. The central bank received bids worth Rs 3,93,352 crore, for a notified amount of Rs 5 lakh crore. It accepted all bids at a cut-off and weighted average rate of 5.24 per cent, according to a release.

Over the last month, the RBI has been conducting VRRR auctions in order to absorb excess surplus liquidity from the banking system and align the overnight money market rates to the repo rate.

The liquidity surplus in the banking system was estimated to be around Rs 10.73 lakh crore on September 11.

Apart from VRRR auctions, last week, the central bank...