Mumbai: The Reserve Bank of India (RBI) injected slightly more than ₹40,000 crore into the banking system under two separate operations on Thursday, a day after the banking system liquidity gap breached the ₹2 lakh crore threshold.The RBI used ₹30,760 crore worth of bids from overnight variable rate repo (VRR) auction and ₹9,892 crore under the government securities buyback window to inject the funds. While in the case of VRR, it accepted 61% of the notified amount, it accepted just 33% in the buyback operation, rejecting bids made at higher rates.Separately, the RBI announced the next daily VRR auction for ₹50,000 crore on Friday. This transaction will be reversed on Monday.Banking system liquidity was in a deficit of ₹2.2 lakh crore as of Wednesday, with an average deficit of ₹1.5 lakh crore as of January, RBI data showed.The first daily overnight VRR auction for ₹50,000 crore received bids worth ₹30,760 crore. All bids were accepted at 6.51%, data showed.The RBI also conducted a five-day VRR auction on January 15, along with a 14-day VRR auction on January 10. This is seen as a reason for tepid demand during, indicating that some banks had comfortable liquidity, economists said."There are 5-day and 14-day VRR auctions in the system. We must look at the daily VRR auctions from a duration perspective. Today, there must be comfortable liquidity with some banks and hence they did not see the need to borrow. Tomorrow, there will be another auction where these banks may need funds," said Sakshi Gupta, principal economist at HDFC Bank.Additionally, in the buyback operation, the RBI accepted 33% of the total ₹30,000 crore notified amount, as some bids may have been aggressive and higher than the RBI's comfort levels, economists said.The central bank started conducting buyback auctions in this fiscal year on May 9, after a gap of six years. Since then, it has conducted eight rounds of such auctions. The RBI accepted 76.8% of the total notified amount in a similar operation held last week, on January 9.
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