India Monetary Policy RBI MPC Decisions — October 12, 2026

SDF at 5.25%, MSF at 5.75% and repo at 5.49% unchanged across October 9 to 12 releases, signalling a stable rate regime

Overnight triparty repo traded at 5.30% weighted average on ₹7,02,935.73 crore volume as of October 9, below the 5.42% to 5.43% term and market repo rates, indicating a shallow short-end premium

Net absorption of ₹3,73,553.90 crore (Oct 9), ₹3,77,856.90 crore (Oct 11) and ₹3,76,435.90 crore (Oct 10) shows sustained surplus liquidity being drained by RBI [BEARISH for short-dated credit demand]

Term segment band of 5.22% to 5.55% is wide relative to the corridor, suggesting dispersed bank funding costs during the period

Zero volume in overnight and term interbank segments on October 10 and 11 reflects thin unsecured interbank participation [BEARISH for interbank liquidity]

₹13,93,819.00 crore surplus as of September 15 provides a structural buffer that offsets near-term absorption [BULLISH for system liquidity]

3-day VRRR auction on October 12 and overnight VRRR on October 13 signal RBI active management of surplus through reverse repo tools

Cash balances of ₹7,84,585.44 crore versus average daily CRR requirement of ₹8,17,219.00 crore for the fortnight ending October 15 implies a shortfall of about ₹32,634 crore that banks must cover [BEARISH for bank liquidity headroom]

Surplus cash balance reckoned for auction was nil as of October 9, indicating no government surplus to sterilise and no additional absorption from fiscal balances

Cash balances of ₹7,84,585.44 crore sit below the ₹8,17,219.00 crore average daily CRR requirement for the fortnight ending October 15, a gap of roughly ₹32,634 crore

Net absorption above ₹3.7 lakh crore across three consecutive daily releases may tighten bank lending capacity if it persists

Zero overnight and term interbank volumes on October 10 and 11 indicate limited unsecured funding depth, raising transmission risk

Term segment spread of 5.22% to 5.55% (about 33 bps) reflects pricing uncertainty and may widen funding costs for weaker borrowers

The October 12 3-day VRRR release omits auction size, cut-off rate and bid-to-cover, limiting visibility into the magnitude of surplus absorption

The net durable liquidity surplus figure of ₹13,93,819.00 crore is dated September 15, 2026, a month older than the other snapshots and potentially outdated

Overnight rate of 5.30% against a 5.25% SDF floor and 5.75% MSF ceiling offers a defined corridor for money market funds seeking carry with limited duration risk

Term triparty repo at 5.43% and market repo at 5.42%, both above the overnight 5.30%, offer a yield pickup for investors willing to extend tenor within the corridor

Outstanding 10-day (₹18,170 Cr) and 29-day (₹79,655 Cr) reverse repo volumes show demand for RBI's absorption window, supporting safe-asset yield for surplus-holding banks

The October 13 overnight VRRR auction provides a near-term, scheduled event for short-tenor liquidity positioning

The ₹13.94 lakh crore net durable surplus signals ample structural liquidity, supporting duration positioning in government securities if absorption eases

Three consecutive daily releases (Oct 9, 10, 11) show net absorption of ₹3.73 to ₹3.78 lakh crore, implying RBI is consistently draining surplus liquidity and keeping short rates anchored near the policy corridor

Overnight and term rates sit between the 5.25% SDF floor and 5.75% MSF ceiling, with the 5.30% overnight rate near the floor, showing market rates tracking the lower corridor boundary

Zero overnight and term interbank volumes on consecutive days underline a shift toward collateralised repo funding over unsecured lending across the banking system

Outstanding repo of ₹1,39,847 Cr against reverse repo positions of ₹18,170 Cr (10-day) and ₹79,655 Cr (29-day) shows a mix of tenors, with banks using both sides of the RBI window

Scheduled for October 13, 2026; watch for auction size and cut-off rate versus the 5.25% SDF floor [Oct 13, 2026]

Watch whether bank cash balances close the roughly ₹32,634 crore gap to the ₹8,17,219.00 crore requirement [Oct 15, 2026]

Track whether the 5.30% weighted average overnight rate moves toward the 5.25% SDF floor or the 5.49% repo rate [ongoing]

Monitor whether the 5.22% to 5.55% term band narrows or widens as absorption continues [ongoing]

Watch whether the ₹3.7 lakh crore plus net absorption persists or reverses in subsequent daily releases [ongoing]

Track resumption of overnight and term interbank activity after zero-volume readings on October 10 and 11 [ongoing]