Mumbai: The Reserve Bank of India's 30-day variable rate reverse repo (VRRR) operation on Monday garnered a muted response as treasury heads did not want to lock in funds for a longer duration. The weak response came despite the banking system liquidity surplus posting a near-five-year high at ₹11.16 lakh crore on September 6.The daily average surplus in September so far is ₹11.01 lakh crore. The daily average was ₹3.67 lakh crore in August and ₹1.07 lakh crore in July.Read more: ESDS rally sparks 5.19% NAV jump in Motilal Oswal Digital India Fund"Most of them do not want to park funds for such a long time at 5.24%. There is also a camp that expected a rate hike in the October policy and would want their funds to get a better rate of interest," said Alok Singh, head of treasury at CSB Bank.Consequently, amid high surplus liquidity, the weighted average call rate (WACR) declined to 4.50%, 100 basis points below the repo rate. The Reserve Bank prefers the call rate to be closely aligned with the repo rate.The RBI will conduct another overnight VRRR auction of ₹5 lakh crore on Tuesday to drain out liquidity.Though the longer-tenor VRRRs are seeing a muted response, demand for overnight operations has been better. For instance, in Monday's overnight VRRR, the RBI received bids worth ₹3.53 lakh crore against the notified amount of ₹5 lakh crore.