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RBI announces Rs 10,000 cr OMO purchase of government securities

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New Delhi: In view of Covid-19 pandemic risks, Reserve Bank of India (RBI) on Wednesday (March 18) decided to conduct open market operations (OMOs) on March 20 in the form of the purchase of an aggregate amount of Rs 10,000 crore of government securities through a multi-security auction using the multiple price method. According to the RBI statement, with the heightening of COVID-19 pandemic risks, certain financial market segments have been experiencing a tightening of financial conditions as reflected in the hardening of yields and widening of spreads. It is important to ensure that all market segments remain liquid and stable, and function normally. The central bank further said, There is no notified amount against any of these securities within the aggregate ceiling of Rs 10,000 crore set for the operation.   Meanwhile, the RBI said that it reserves the right to decide on the quantum of purchase of individual securities, accept offers for less than or higher than the aggregate amount of Rs 10,000 crore (including due to rounding off) and also to accept or reject any or all the offers either wholly or partially without assigning any reason. Accordingly, eligible participants have been asked to submit their offers in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system between 10.30 am and 12 noon on March 20, 2020.  Physical offers would be accepted only in the event of system failure and in that event, they should be submitted to the Financial Markets Operations Department (email; Phone no: 022-22630982) in the prescribed form obtainable from the RBI’s website (https: www.rbi.org.in Scripts BS_ViewForms.aspx) before 12.00 noon, it said. The result of the auction will be announced on the same day and payment to successful participants will be made during banking hours on March 23.  Successful participants should ensure availability of the requisite amount of securities in their subsidiary general ledger (SGL) accounts by 12 noon on March 23, the statement added.

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