After a review of current liquidity and financial conditions, the Reserve Bank of India (RBI) has decided to conduct simultaneous purchase and sale of government securities under open market operations (OMO) for Rs 10,000 crore each on March 18.
The Reserve Bank will purchase these securities using the multiple price auction method at 5.15 per cent to 7.95 per cent interest rate.
The RBI will simultaneously sell the following securities at 8.15 per cent to 8.35 per cent interest rate.
The Reserve Bank reserves the right to decide on the quantum of purchase or sale of individual securities. It'll also hold the right to accept bids or offers for less than the aggregate amount. The RBI also can buy or sell marginally higher or lower than the aggregate amount due to rounding-off. Besides, it can also accept or reject offers without assigning any reasons.
The eligible participants must submit their bids in electronic format on the RBI core banking solution (E-Kuber) system between 10am and 11am on March 18.
Physical bids will be accepted only in the event of system failure, which should be submitted to the financial markets operations department as prescribed, which can be obtained from the RBI website.
The result of the auctions will be announced on the same day and successful participants must have funds or securities in their current account by 12 noon on March 19.
The central bank has said it'll continue to monitor evolving liquidity and market conditions and take appropriate measures to ensure orderly functioning of financial markets.