RBI to conduct simultaneous purchase, sale of securities for ₹15,000 crore today. All you need to know
The Reserve Bank of India will conduct simultaneous purchase and sale of government securities on Thursday under the Open Market Operation(OMO) for an amount of ₹15,000 crore each.
The decision for the purchase and sale of the securities was taken after a review of current liquidity and financial conditions, the central bank said in a statement.
The RBI will purchase and sale bonds under OMO using the multiple price auction method. The details of which can be viewed here (https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=51170).
According to the RBI guidelines, eligible participants taking part in the open market operations for the purchase and sale of government securities should submit their bid or offer in electronic form on the Reserve Bank of India Core Banking Solution (E-Kuber) system. The participants should submit the bid between 10am and 11am on Thursday.
Physical bids are acceptable only in the events of system failure. The physical bid or offer needs to be submitted to the Financial Markets Operations Department in the prescribed form given by the central bank before 11am on March 4. The required form and contact details of the Financial Markets Operations Department can be obtained from the official website of RBI.
The results of the auction will also be announced on Thursday. RBI requires the participants to ensure the availability of funds or securities in their Current account or SGL account by 12 noon on Friday.
The bank also holds the right to decide on the quantum of purchase and sale of individual securities. It can accept bid or offers for less than the aggregate amount of ₹15,000 crores, can purchase and sale marginally higher or lower than the amount for rounding off purposes and can accept or reject any or all bond or offer either wholly or partially, sans any reasons.
The Reserve Bank also said that it will continue to monitor liquidity and market conditions and will take measures to ensure the proper functioning of the financial markets.