RBI to conduct first ever OMO purchase of state government securities – Check details of Rs 10,000 OMO

New Delhi: The Reserve Bank of India will conduct a purchase auction of State Developments Loans under Open Market Operations (OMOs) for an aggregate amount of Rs 10,000 crores on October 22, 2020. This is the first ever OMO purchase of SDLs.

 “As announced in the Statement on Developmental and Regulatory Policies dated October 09, 2020, the Reserve Bank will conduct Open Market Operations (OMOs) in State Developments Loans (SDLs). It has been decided to conduct a purchase auction of SDLs under Open Market Operations (OMOs) for an aggregate amount of Rs 10,000 crores on October 22, 2020, keeping in view that this is the first ever OMO purchase of SDLs. Depending on market response, the size of the auctions may be enhanced in the subsequent auctions,” an RBI statement said.

RBI will purchase the SDLs through a multi-security auction using the multiple price method. There is no security-wise notified amount.

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The Reserve Bank said that it reserves the right to decide on the quantum of purchase of individual securities; accept bids for less than the aggregate amount; purchase marginally higher/lower than the aggregate amount due to rounding-off; and accept or reject any or all the bids either wholly or partially without assigning any reasons.

Eligible participants should submit their bids in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system on October 22, 2020.

Only in the event of system failure, physical bids/offers would be accepted. Such physical bid/offer should be submitted to Financial Markets Operations Department in the prescribed form obtainable from RBI website.

The result of the auction will be announced on the same day and successful participants should ensure availability of requisite amount of securities in their SGL account on October 23, 2020.