The Reserve Bank of India faced a technical glitch on its E-Kuber platform today during a 30-day liquidity auction aimed at absorbing a ₹7 lakh crore surplus. As bank participation dropped, the central bank initiated an emergency overnight withdrawal to keep short-term interest rates stable. The disruption underscores operational risks as the regulator manages record-high cash inflows from recent foreign currency schemes.
On September 7, 2026, the Reserve Bank of India (RBI) encountered a significant technical failure on its E-Kuber platform, forcing a swift change in its plan to manage banking system liquidity. The central bank had intended to conduct a 30-day variable rate reverse repo auction to absorb ₹7 lakh crore from the market. However, due to the system error, many banks were unable to place their bids, resulting in subscription levels that fell well below the target.
Managing Record Liquidity
The Indian banking system is currently dealing with a massive liquidity surplus, estimated to be over ₹10 lakh crore. This flood of cash is largely the result of significant foreign currency inflows, including funds from a recent special FCNR(B) deposit scheme that raised approximately USD 136 billion. When there is too much cash in the banking system, it can push short-term interest rates down, causing them to deviate from the RBI’s intended policy rate. Managing this surplus is crucial for the central bank to ensure that its monetary policy transmission works as planned.
Emergency Measures and Operational Risks
To prevent market volatility after the auction failure, the RBI quickly switched to an emergency overnight liquidity withdrawal operation. This move was essential to maintain control over short-term funding conditions. While the system was restored to stability, the incident has brought attention to the resilience of the RBI’s digital infrastructure. As the central bank conducts frequent and high-volume operations to soak up excess cash, any technical downtime in the E-Kuber portal creates friction in monetary policy implementation. Market participants will likely track how the regulator strengthens its secondary platforms and contingency plans to ensure that future liquidity tightening cycles do not face similar access issues.