The Reserve Bank of India absorbed Rs 2,10,192 crore of liquidity from the banking system on Monday through two overnight variable rate reverse repo (VRRR) auctions, as surplus cash piles up in the system.

In the first auction, the RBI received bids worth Rs 2,10,688 crore against a notified Rs 2 lakh crore and accepted Rs 2,00,050 crore at a weighted average rate of 5.24 percent. The second auction drew bids of only Rs 10,142 crore against Rs 50,000 crore notified, which the bank accepted in full.

The RBI also announced a Rs 3 lakh crore one-day VRRR auction for Wednesday, October 7, following a Rs 2.5 lakh crore auction on Tuesday. Surplus liquidity stood at around Rs 5.16 lakh crore in early October.

The surplus has been driven by foreign currency inflows through FCNR(B) deposits and month-end government spending on salaries and pensions. The RBI uses VRRR auctions to keep overnight money market rates aligned with the policy repo rate.