The Reserve Bank of India (RBI) will conduct open market operation (OMO) sale auctions of Government of India securities worth a total of Rs 1 lakh crore in three tranches this month, as the central bank moves to manage prevailing and evolving liquidity conditions.
The RBI said the OMO sales will be conducted through multi-security auctions using the multiple price method.
The first auction, worth Rs 50,000 crore, will be held on Sept. 17, followed by auctions of Rs 25,000 crore each on Sept. 21 and Sept. 28.
For the Sept. 17 auction, the RBI will offer six government securities with maturities ranging from 2029 to 2032. The securities include the 7.59% Government Security 2029 maturing on March 20, 2029; 6.79% GS 2029 maturing on Dec. 26, 2029; and 7.61% GS 2030 maturing on May 9, 2030.
The central bank will also offer the 5.77% GS 2030 maturing on Aug. 3, 2030, 6.68% GS 2031 maturing on Sept. 17, 2031, and 8.28% GS 2032 maturing on Feb. 15, 2032.
The aggregate notified amount for the auction is Rs 50,000 crore, with no security-wise notified amount specified.
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The RBI has reserved the right to decide the quantum of individual securities sold and may accept bids for less than the notified aggregate amount. It may also sell marginally higher or lower than the aggregate amount due to rounding-off. The central bank can accept or reject any or all bids, either wholly or partially, without assigning a reason.
Eligible participants will have to submit their bids electronically through the RBI’s Core Banking Solution (E-Kuber) system between 9:30 am and 10:30 am on September 17. Physical bids will be accepted only in the event of a system failure and will have to be submitted in the prescribed format before 10:30 am.
The auction results will be announced on the same day. Successful participants will be required to ensure that the securities are available in their Subsidiary General Ledger (SGL) accounts by 12 noon on September 18.
The three OMO sales, totalling Rs 1 lakh crore, will be closely watched by the bond market as the RBI adjusts liquidity conditions through government securities transactions.