20 October 2026 · Daily Current Affairs

Cover Story

The tap turns: from VRRR to VRR

19 October 2026 | Reserve Bank of India, Press Releases 2026-2027/1347 and 1355

The RBI allotted Rs 1,00,014 crore in the 7-day Variable Rate Repo (VRR) auction held on 19 October 2026 against a notified amount of Rs 1,00,000 crore. Bids received totalled Rs 1,50,735 crore; the cut-off rate was 5.51% and the weighted average rate 5.52%.

The same day, the RBI announced an overnight VRR auction of Rs 50,000 crore for 21 October 2026 (window 09:30-10:00 AM; reversal on 22 October), "on a review of current and evolving liquidity conditions in the near term".

A VRR auction injects liquidity: banks bid to borrow funds from the RBI against collateral. Through 13-15 October, the RBI had been running overnight Variable Rate Reverse Repo (VRRR) auctions, which absorb surplus liquidity. The shift from VRRR to VRR indicates system liquidity has moved towards deficit.

Exam takeaway: The direction of the operation is the message: repo (VRR) means the RBI is lending into a deficit; reverse repo (VRRR) means it is draining a surplus.

Quick revision: RBI shifts to VRR: Rs 1 lakh crore 7-day allotted at 5.51% cut-off.

RBI & Regulatory Updates

RBI extends Directions on The Konark Urban Co-operative Bank, Ulhasnagar, up to 23 January 2027

19 October 2026 | Reserve Bank of India, Press Release 2026-2027/1353

The Reserve Bank of India has extended the Directions issued to The Konark Urban Co-operative Bank Ltd., Ulhasnagar under Section 35A read with Section 56 of the Banking Regulation Act, 1949 for a further period of three months, from close of business on 23 October 2026 to close of business on 23 January 2027, subject to review.

The Directive was first issued on 23 April 2024 for six months up to close of business on 23 October 2024 and was last extended on 15 July 2026 up to close of business on 23 October 2026.

RBI states that the extension should not per-se be construed to imply that it is satisfied with the financial position of the bank. Other terms and conditions of the Directive remain unchanged.

Exam takeaway: Note the exact statutory basis (Section 35A r/w Section 56 of the BR Act, 1949) and that an extension of directions is not a clean chit.

Quick revision: Konark UCB: 35A directions extended to 23 Jan 2027.

Banking & Financial Industry News

Union Bank of India Q2 net profit up 30.31% to Rs 5,537 crore; GNPA improves to 2.42%

19 October 2026 | Union Bank of India, Q2 FY2027 investor presentation filed with BSE and NSE

Union Bank of India's exchange-filed Q2 FY2027 presentation dated 19 October 2026 reports net profit of Rs 5,537 crore for the September quarter, up 30.31% year on year (Rs 4,249 crore in Q2 FY2026). Half-year net profit was Rs 10,870 crore, up 29.95%.

Net interest income for the quarter rose 20.09% year on year to Rs 10,583 crore; half-year NII was Rs 20,620 crore. Credit cost for the quarter was 0.21%.

Asset quality improved: Gross NPA ratio stood at 2.42% at end-September 2026 (2.65% at end-June 2026) and Net NPA ratio at 0.42%.

Exam takeaway: Quarter figures and half-year figures are both reported; check which period a question cites.

Quick revision: Union Bank Q2: PAT Rs 5,537 crore, up 30.31%; GNPA 2.42%.

Economy & Financial Awareness

RBI moves to inject liquidity: Rs 1 lakh crore 7-day VRR allotted; Rs 50,000 crore overnight VRR announced for 21 October

19 October 2026 | Reserve Bank of India, Press Releases 2026-2027/1347 and 1355

The RBI allotted Rs 1,00,014 crore in the 7-day Variable Rate Repo (VRR) auction held on 19 October 2026 against a notified amount of Rs 1,00,000 crore. Bids received totalled Rs 1,50,735 crore; the cut-off rate was 5.51% and the weighted average rate 5.52%.

The same day, the RBI announced an overnight VRR auction of Rs 50,000 crore for 21 October 2026 (window 09:30-10:00 AM; reversal on 22 October), "on a review of current and evolving liquidity conditions in the near term".

A VRR auction injects liquidity: banks bid to borrow funds from the RBI against collateral. Through 13-15 October, the RBI had been running overnight Variable Rate Reverse Repo (VRRR) auctions, which absorb surplus liquidity. The shift from VRRR to VRR indicates system liquidity has moved towards deficit.

Exam takeaway: The direction of the operation is the message: repo (VRR) means the RBI is lending into a deficit; reverse repo (VRRR) means it is draining a surplus.

Quick revision: RBI shifts to VRR: Rs 1 lakh crore 7-day allotted at 5.51% cut-off.

National, International & Appointments

India to host the 61st CIML meeting for the first time, in New Delhi from 26 to 28 October 2026

19 October 2026 (PIB release) | Press Information Bureau, Government of India

India will host the 61st Meeting of the International Committee of Legal Metrology (CIML) for the first time, from 26 to 28 October 2026 in New Delhi. The meeting is organised by the Department of Consumer Affairs, Government of India, in association with the International Organization of Legal Metrology (OIML).

More than 100 international delegates and legal metrology experts are expected, including representatives of OIML Member States, Corresponding Member States and international organisations. An international seminar on "Evolutions in Legal Metrology" is scheduled on 26 October and an OIML Strategy Workshop on 27 October.

Members will deliberate on international recommendations, OIML technical activities, the OIML Certification System (OIML-CS), digital transformation, capacity building and international cooperation. The 60th CIML meeting was held in October 2025 in Paris, France.

Exam takeaway: Remember the pair: CIML is the committee; OIML is the organisation. Venue-first-time facts are a favourite exam hook.

Quick revision: 61st CIML: New Delhi, 26-28 Oct, first time in India.

National, International & Appointments

Private-bank corner offices: Anup Bagchi takes over HDFC Bank on 27 October; Kotak names Anup Kumar Saha as next MD & CEO

Reports of 13-18 October 2026 | Livemint report of 17 October 2026 (HDFC Bank); Financial Express report of 13 October 2026 (Kotak Mahindra Bank)

HDFC Bank CEO-designate Anup Bagchi, who joined the bank as an additional director from the ICICI Group, is set to take over as MD & CEO on 27 October 2026, Livemint reported on 17 October. He said his first priority would be to meet customers and regulators. The September quarter was the last full quarter for incumbent Sashidhar Jagdishan, who became CEO in 2020 after Aditya Puri stepped down.

Kotak Mahindra Bank has appointed Anup Kumar Saha as its next MD & CEO, the Financial Express reported on 13 October. Incumbent Ashok Vaswani decided not to seek reappointment after completion of his current term on 31 December 2026, and the board has accepted the decision.

These are appointment and succession facts with their own dates; the HDFC change takes effect on 27 October 2026, while the Kotak transition follows the completion of Vaswani's term on 31 December 2026.

Exam takeaway: Appointment announced, date of taking charge and end of the incumbent's term are three different facts; keep each with its date.

Quick revision: HDFC: Bagchi from 27 Oct. Kotak: Saha next, Vaswani till 31 Dec.

Knowledge Article

Reading the LAF corridor: what a VRR auction signals

RBI Liquidity Adjustment Facility FAQ and RBI press releases of 19 October 2026

The Liquidity Adjustment Facility lets scheduled commercial banks (excluding RRBs) and primary dealers borrow from the RBI against government-security collateral when short of funds, or park surplus funds with the RBI. It is the day-to-day tool of liquidity management.

The corridor: the Marginal Standing Facility rate (5.75%) caps overnight money rates at the top and the Standing Deposit Facility rate (5.25%) floors them at the bottom, with the policy repo rate (5.50%) in between. Banks lend surplus to the RBI at the SDF rate and borrow at the margin at the MSF rate.

Within the corridor, fine-tuning auctions steer actual liquidity. A Variable Rate Repo (VRR) auction injects funds: banks bid to borrow, and the cut-off settles near the policy rate (5.51% on 19 October against a 5.50% repo). A Variable Rate Reverse Repo (VRRR) auction absorbs surplus funds.

So the direction of the operation is the message. When the RBI moves from daily VRRRs (13-15 October) to a 7-day VRR (19 October) and an overnight VRR (21 October), it is telling the market that system liquidity has moved towards deficit.

Practical Banking Case Study

Computing CRR and SLR balances from an assumed deposit base

Illustrative study, not news. Balance-sheet figures below are assumed; ratios verified on 20 October 2026.

Assume a scheduled commercial bank has net demand and time liabilities (NDTL) of Rs 2,00,000 crore. Current requirements: CRR 3.00% and SLR 18.00%.

Exam takeaway: Both ratios apply to NDTL: CRR as non-interest-bearing balances with the RBI, SLR as approved assets held by the bank. A 1 percentage point change moves Rs 1,000 crore per Rs 1,00,000 crore of NDTL.

Today's Scheme

Pradhan Mantri Suraksha Bima Yojana (PMSBY): features and current terms

Department of Financial Services, Ministry of Finance

PMSBY is a one-year personal accident insurance cover, renewable from year to year, protecting against death or disability due to accident. Accident means a sudden, unforeseen and involuntary event caused by external, violent and visible means.

Benefits: Rs 2 lakh on death, and on total and irrecoverable loss of both eyes or loss of use of both hands or feet or loss of sight of one eye with loss of use of one hand or foot; Rs 1 lakh on total and irrecoverable loss of sight of one eye or loss of use of one hand or foot. The premium is Rs 20 per annum per member, paid by auto-debit from the subscriber's bank or post office account in one instalment.

All individual (single or joint) account holders of participating banks or post offices aged 18 to 70 years can join; a person with multiple accounts can join through one account only. The cover year runs from 1 June to 31 May, and risk cover for a new or rejoining subscriber starts from the date of auto-debit of the premium.

The scheme is offered and administered through public sector general insurance companies and other willing general insurers, in collaboration with participating banks. Cover ceases on attaining age 70, on closure of the account, or on insufficient balance to keep the insurance in force.

Exam takeaway: Keep the twin schemes apart: PMSBY is accident insurance at Rs 20 a year (Rs 2 lakh cover); PMJJBY is life insurance at Rs 436 a year (Rs 2 lakh cover). Premium and cover-type are the standard mix-ups.