To ensure availability of liquidity in the system, the Reserve Bank of India (RBI) will conduct the purchase of government securities under Open Market Operations (OMO) for Rs 20,000 crore on February 10.
The Reserve Bank says the decision was taken after reviewing current liquidity and financial conditions, and that the move will foster "congenial financial conditions".
The Reserve Bank will purchase the government securities through a multi-security auction using the multiple price method. The apex bank has said it'll decide on the quantum of purchase of individual securities. Also, it'll have the final say in accepting bids for less than the aggregate amount; purchase marginally higher/lower amount due to rounding-off; and accept or reject bids.
Participants must submit bids online on the RBI's Core Banking Solution (E-Kuber) system between 10:00 am and 11:00 am on February 10. "Only in the event of system failure, physical bids would be accepted by Financial Markets Operations Department (Phone no: 022-22630982)," says the central bank.
Before this, the RBI had conducted the purchase of G-sec securities under OMO for Rs 10,000 crore on January 21.
RBI Governor Shaktikanta Das, during a monetary policy committee meeting on last Friday, said the apex bank will continue to maintain an "accommodative liquidity stance" to support growth in the economy battered by the COVID-19 pandemic.
The RBI's market operations amid the pandemic have dispelled illiquidity fears and bolstered financial market sentiment, he said.
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