RBI auction sucks off nearly Rs50,000 crore from banking system
08 Apr 2011
The Reserve Bank of India today sold government bonds for a total amount of Rs50,555 crore as part of its second liquidity adjustment facility.
RBI sold 5.75 per cent GoI securities for a total amount of Rs50,555 crore to 39 bidders, the central bank said in a release today.
RBI also purchased 6.75 per cent government bonds for a total of Rs1,525 crore in five bids.
The net withdrawal of liquidity from the system works out to Rs49,030 crore.
The central bank is also planning to sell short-term (91- and 182-days) treasury bills for a total of Rs6,000 crore in separate auctions on 13 April.
However, RBI has extended the additional liquidity support to scheduled commercial banks under the LAF of up to one per cent of their net demand and time liabilities (NDTL) up to 6 May 2011.
Banks can avail of the facility for any shortfall in maintenance of the statutory liquidity ratio (SLR) without paying penal interest on a fortnightly basis, as a temporary measure, RBI said, adding, the second LAF will be conducted on a daily basis up to 6 May 2011.
These facilities will be reviewed after the RBI considers the recommendations of the report of the working group on operating procedure of monetary policy headed by Deepak Mohanty.
