The Reserve Bank of India (RBI) on Monday said that it is going to conduct simultaneous purchase and sale of government securities under the Open Market Operation (OMO) for an amount of Rs 10,000 crore each on September 10 (Thursday).
The central bank on August 31 had announced that it would “conduct special simultaneous purchase and sale of government securities under OMO for an aggregate amount of Rs 20,000 crore in two tranches of Rs 10,000 crore each” as part of its measures to foster orderly market conditions.
“The first auction is scheduled for September 10, 2020,” the RBI said in a statement. The central bank would be selling three securities totalling Rs 10,000 crore and also purchasing equal number of securities of the same amount.
The second tranche of auction is scheduled for September 17.
“Eligible participants should submit their bids/offers in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system between 10:00 am and 11:00 am on September 10, 2020. Only in the event of system failure, physical bids/offers would be accepted,” an RBI release said on Monday.
“The result of the auctions will be announced on the same day and successful participants should ensure availability of funds/securities in their Current account/SGL account, as the case may be, by 12 noon on September 11, 2020,” the release said.
Simultaneous purchase and sale of government securities under OMOs, popularly known as Operation Twist, involves purchasing G-Sec of longer maturities and selling an equal amount of G-Sec of shorter maturities.