Liquidity conditions are undergoing some stress in the recent period, primarily on account of the build-up of cash balances of the Government of India. In order to address the temporary liquidity deficit situation, the Reserve Bank has been infusing additional liquidity through 7/14/28 days term repo auctions in addition to the existing overnight repo under liquidity adjustment facility and standing liquidity facilities. The current assessment suggests that the strain on market liquidity is likely to remain enduring in view of the fiscal targets set for the year as well as projections for aggregate credit growth, warranting the need to provide liquidity of a more permanent nature. Accordingly, the Reserve Bank has decided to conduct Open Market Operations by purchasing the following government securities for an aggregate amount of `10,000 crore on January 22, 2014 (Wednesday) through multi-security auction using the multiple price method:

Sr. No

Security

Date of Maturity

1

8.07% GS 2017 (Jul)

July 3, 2017

2

7.28% GS 2019

June 3, 2019

3

7.16% GS 2023

May 20, 2023

4

8.28% GS 2027

September 21, 2027

The auction shall be conducted by the Financial Markets Department, Reserve Bank of India, Fort, Mumbai on January 22, 2014 (Wednesday).

Market participants may take note of the following:

There is an overall aggregate ceiling of `10,000 crore for all the securities in the basket put together. There is no security-wise notified amount.

RBI reserves the right to:

         • Decide on the quantum of purchase of individual securities.
         • Accept less than the aggregate amount of `10,000 crore.
         • Purchase marginally higher than the aggregate amount due to rounding effects.
         • Accept or reject any or all of the offers either wholly or partially without assigning any reason

The eligible participants should submit their offers in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system between 10.30 a.m. and 12.00 noon on January 22, 2014 (Wednesday). Any physical offer should be submitted to Mumbai Office (Public Accounts Department) in the prescribed form obtainable from the Regional Director, Reserve Bank of India, Mumbai Office, Fort, Mumbai-400001 and/or RBI website (www.rbi.org.in)

The result of the auction will be announced on the same day and payment to successful offerers will be made during banking hours on January 23, 2014 (Thursday). Successful offerers may note to make available the requisite amount of securities in their SGL account by 12 noon on January 23, 2014 (Thursday).

Ajit Prasad
Assistant General Manager

Press Release : 2013-2014/1445



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