RBI Liquidity Update: Banking System Cash Surplus Persists, ₹1.82 Lakh Crore Parked in SDF; Overnight Rate Steady at 5.74%
The Reserve Bank of India (RBI) has released its daily liquidity and money market operations report for October 26, 2026. The data shows that cash conditions in the banking system remain comfortable. The RBI also intervened actively to manage the excess money in the market. The report was issued by the RBI's Department of Communication and signed by Deputy General Manager Ajit Prasad.
Banks Hold More Cash Than the CRR Requirement
According to the RBI, scheduled commercial banks held total cash balances of ₹8,45,510.55 crore with the central bank. The required average daily CRR for the current fortnight (ending October 31, 2026) is ₹8,33,309.00 crore. This leaves banks with an operational buffer of over ₹12,200 crore above the mandated level.
In simple terms, banks are under no major pressure to meet their reserve requirements at the moment.
RBI Operations at a Glance
On October 26, the RBI absorbed a net ₹34,082.13 crore of liquidity from the system, i.e. it pulled excess cash out of the market. The key operations of the day were:
- Standing Deposit Facility (SDF): Banks parked ₹1,82,261.00 crore of surplus cash with the RBI. The SDF rate is 5.25%, the floor of the policy corridor.
- Marginal Standing Facility (MSF): Banks with overnight needs borrowed ₹17,385.00 crore. The MSF rate is 5.75%, the ceiling of the corridor.
- Variable Rate Repo (VRR): The RBI injected ₹1,50,007.00 crore through a 4-day VRR auction. The cut-off rate was 5.55%.
The corridor between SDF (5.25%) and MSF (5.75%) is 50 basis points wide, which puts the policy repo rate at 5.50%. The VRR cut-off rate came in 5 basis points above that.
Heavy Volumes in the Money Market
Total overnight segment volume stood at ₹6,99,171.74 crore, with a weighted average rate (WAR) of 5.74%.
- Triparty Repo: This is the safest, collateralised segment. It recorded a volume of ₹4,88,510.00 crore, roughly 70% of total overnight trading. Rates in this segment stayed in a narrow range of 5.70% to 5.86%.
- Call Money: This is the uncollateralised segment. It saw trading of ₹14,747.62 crore at a weighted average rate of 5.81%.
The call money rate was slightly above the triparty repo average. This gap is normal, since unsecured lending carries higher risk.
What It Means for the Markets
Banking sector: Surplus liquidity eases funding worries for banks. The ₹1.82 lakh crore deposited in the SDF shows that banks have more cash than they can lend out.
Rate direction: The overnight WAR (5.74%) is above the policy repo rate (5.50%). This suggests liquidity is not excessively loose. Rates are leaning toward the upper end of the corridor, but the range is narrow, which means low volatility in the market.
Retail borrowers: When banks face no funding pressure, there is less urgency to raise lending rates. EMIs on home, auto and personal loans are expected to remain steady for now.
Companies: With short-term rates in a tight band, working capital loans and commercial paper issuance remain relatively cheap and easy. This could support business activity in the last quarters of the financial year.
What Investors Should Watch
- End of the fortnight: The CRR maintenance fortnight ends on October 31. Banks' liquidity demand may see some movement around then.
- VRR/VRRR auctions: The tenor and rates the RBI chooses for future operations will signal its liquidity stance.
- Overnight rates: If the WAR stays well above the repo rate, it would be read as a sign of liquidity tightening.
- Bond yields: Stable liquidity is generally positive for the government bond market.
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Bottom line: The latest RBI data shows there is ample cash in the system and the central bank is actively managing it. The narrow rate corridor and heavy market volumes suggest the money market is functioning smoothly. For now, the RBI's focus is on keeping rates stable within the policy corridor.
