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Business Standard
5 days ago
- Business
- Business Standard
Post offices to freeze inactive accounts: Here's what customers must do
The postal department has begun a twice-yearly drive to freeze small savings accounts inactive for more than three years after maturity, aiming to protect depositors' funds and prevent unauthorised access. As a new practice, post offices will identify such accounts every January and July. If your account has matured but you haven't withdrawn the funds or extended the tenure within three years, it risks being frozen. Which accounts are impacted? The rule applies to all major small savings schemes, including: Time Deposits Monthly Income Scheme Public Provident Fund Senior Citizen Savings Scheme Kisan Vikas Patra National Savings Certificates Recurring Deposit Once frozen, no transactions, withdrawals, deposits, standing instructions or online services will be allowed until the account is reactivated. 'The process of identifying and freezing such accounts will be completed within 15 days, starting from 1 January and 1 July every year,' said the department in a circular dated July 15, 2025. How to unfreeze an account To regain access, account holders must visit a post office and submit a few key documents for verification. Here's what you need: -Passbook or certificate of the frozen account -KYC documents: Aadhaar, PAN and address proof -Account Closure Form (SB-7A) -Cancelled cheque or a copy of a bank/post office savings account passbook for crediting the maturity value Post office staff will verify your identity and signature before reactivating the account. Once cleared, the maturity proceeds will be credited to your linked savings account or bank account through electronic transfer. If you hold any small savings account, check its maturity date and act quickly to avoid disruption. Proactive closure or extension within three years of maturity ensures uninterrupted access to your funds.
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Business Standard
6 days ago
- Business
- Business Standard
RBI to hold ₹2 trillion 7-day VRRR auction to absorb surplus liquidity
The Reserve Bank of India (RBI) plans to conduct a seven-day Variable Rate Reverse Repo (VRRR) auction on Friday to absorb Rs 2 trillion from the banking system. Despite a series of VRRR auctions, net liquidity in the system remains in surplus of more than Rs 3 trillion. The net liquidity in the banking system was in a surplus of Rs 3.11 trillion on Wednesday, latest RBI data showed. 'There is a reversal of around Rs 2.07 trillion on Friday, that's why the RBI is conducting the Rs 2 trillion VRRR auction. The objective of the RBI is to align overnight rates with the repo rate,' said V R C Reddy, Head of Treasury, Karur Vysya Bank. 'I doubt it will be fully subscribed given that we have around Rs 1.2 trillion of GST outflows coming up,' he added. A net surplus liquidity of around Rs 3 trillion in the banking system has largely kept the overnight Weighted Average Call Rate (WACR) near the Standing Deposit Facility (SDF) rate of 5.25 per cent and below the repo rate of 5.50 per cent, with Tri-party Repo (TREPS) rates also slipping below the SDF. The overnight WACR settled at 5.35 per cent, against the previous day's close of 5.36 per cent, while the overnight TREPS rate settled at 5.28 per cent, unchanged from Wednesday. WACR is the operating target of monetary policy, which the central bank aims to keep close to the repo rate. The RBI had received bids worth Rs 57,450 crore in its three-day VRRR auction on Tuesday, against the notified amount of Rs 1 trillion. Market participants said banks were reluctant to park larger amounts at the auction due to the fortnightly reporting period at the end of the current week. There was also uncertainty over the quantum and tenor of upcoming VRRRs. As banks have already parked Rs 1.5 trillion at the seven-day VRRR auction on Friday, they were unwilling to lock in more funds. The RBI's VRRR operations are aimed at absorbing surplus liquidity from the system and anchoring short-term rates closer to the policy repo rate.
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Business Standard
14-07-2025
- Business
- Business Standard
RBI to hold 3-day VRRR auction Tuesday to absorb ₹1 trillion liquidity
The Reserve Bank of India (RBI) on Monday announced a ₹1 trillion Variable Rate Reverse Repo (VRRR) auction for a three-day tenor, to be conducted on Tuesday. 'Given today's overnight rates, the auction was expected,' said the treasury head at a private bank. 'Demand at Friday's auction was also subdued. The RBI likely wants to align the VRRR maturities to avoid overlapping with GST outflows, which is why this one is for three days,' he added. The overnight Weighted Average Call Rate (WACR) settled at 5.31 per cent, against the previous day's close of 5.45 per cent, while the overnight tri-party repo rate settled at 5.19 per cent, down from 5.30 per cent on Friday. A net surplus liquidity of around ₹3 trillion in the banking system has kept the overnight WACR near the Standing Deposit Facility (SDF) rate of 5.25 per cent and below the repo rate of 5.50 per cent, with TREPS rates also slipping below the SDF. As of Sunday, the net liquidity in the banking system was in surplus by ₹2.92 trillion, according to the latest data from the RBI. 'Given that it's short term, the demand will be there. The RBI was looking to absorb ₹2.5 trillion on Friday. ₹1.5 trillion was subscribed; the rest they want to absorb with short term [operations] because the surplus is still around ₹3 trillion,' said a dealer at a state-owned bank. The RBI's seven-day VRRR auction on Friday received tepid demand from banks as the auction amount exceeded the market's expectation of ₹2 trillion, and the bidding amount fell short of the notified ₹2.5 trillion. The central bank received bids worth ₹1.51 trillion and accepted the entire amount at a cut-off rate of 5.49 per cent.
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Business Standard
13-07-2025
- Business
- Business Standard
Amount parked in RBI's SDF window declines on back of VRRR auctions
The amount parked by banks in the Reserve Bank of India's SDF window has fallen significantly, driven by VRRR auctions, with the call rate aligning closer to the repo rate Listen to This Article The amount parked by banks in the Reserve Bank of India's Standing Deposit Facility (SDF) window declined to Rs 1.2 trillion from Rs 3.26 trillion at the start of the month, driven by variable rate reverse repo (VRRR) auctions, according to market participants. The SDF amount on Thursday was the lowest since 22 April of the current year, the latest data from the RBI showed. 'Banks are parking their funds in VRRR, which is why there has been a decrease in the SDF amount,' said a money market dealer at a state-owned bank. 'The overnight rates have also moved up,
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Business Standard
09-07-2025
- Business
- Business Standard
RBI accepts ₹97,315 crore in VRRR auction; cut-off rises to 5.49%
The Reserve Bank of India (RBI) received bids worth ₹97,315 crore in its two-day Variable Rate Reverse Repo (VRRR) auction on Wednesday, against the notified amount of ₹1 trillion. The central bank accepted the entire bid amount at a cut-off rate of 5.49 per cent, higher than the 5.47 per cent cut-off in the previous seven-day VRRR auction held on July 4, which had attracted bids totalling ₹1.7 trillion. Caution prevails ahead of expected ₹2 trillion auction Market participants attributed the lower-than-notified bidding to cautious sentiment ahead of an expected ₹2-trillion VRRR auction announcement. Additionally, the maturity of Wednesday's operation coincides with the reversal of the previous VRRR, further curbing participation. 'There is expectation of a ₹2-trillion VRRR announcement either today or tomorrow, which is why there is caution,' said a dealer at a primary dealership. 'Also, there is no clarity on whether the RBI wants the overnight rate at 5.50 per cent or somewhere between the SDF and the repo rate. This uncertainty is leading to caution and a higher cut-off,' he added. There is also uncertainty about the RBI's broader rate strategy — whether it intends to steer the overnight call rate closer to the 5.50 per cent repo rate, or maintain it within the corridor between the Standing Deposit Facility (SDF) rate of 5.25 per cent and the repo rate. The overnight Weighted Average Call Rate (WACR) was trading at 5.34 per cent, up from the previous close of 5.26 per cent. The overnight TREP rate also rose to 5.29 per cent, compared with 5.13 per cent on Tuesday. Dealers said the call rate had inched up to 5.30 per cent ahead of the expected announcement. As of Tuesday, the net liquidity in the banking system was in surplus by ₹3.07 trillion, according to the RBI's latest data. The RBI conducts VRRR operations to absorb excess liquidity from the banking system and to keep short-term rates aligned with the policy repo rate.
