RBI Revised OMO Operations to ₹40,000 Crore on February 13

On Monday, February 10, 2025, the Reserve Bank of India (RBI) announced it will double the size of its open market operation (OMO) purchase to ₹40,000 crore on February 13, up from the previously planned ₹20,000 crore. The move aims to ease the ongoing liquidity deficit in the banking system.

“Based on a review of current and evolving liquidity conditions, the aggregate OMO purchase amount has been revised to ₹40,000 crore,” the RBI stated in its notification.

Process for Participants

Eligible participants must submit bids electronically via the RBI’s E-Kuber system between 10:30 AM and 11:30 AM on February 13, 2025. In case of system failure, physical bids will be accepted at the Financial Markets Operation Department, with details available on the RBI website.

Auction results will be announced the same day, and successful bidders must ensure securities are available in their Subsidiary General Ledger (SGL) account by 12 noon on February 14.

Additionally, the RBI has set the notified amount for its daily Variable Rate Repo (VRR) auction at ₹2 lakh crore on February 11.

RBI’s Previous Liquidity Operations

As of February 7, the banking system faces a liquidity shortfall of ₹1.33 lakh crore, marking eight consecutive weeks of deficit, according to Reuters. Last week, banks bid for twice the notified amount at the RBI’s 56-day VRR auction. The central bank has already infused over ₹1 lakh crore through bond purchases and dollar/rupee swaps, along with ₹50,000 crore via a 56-day repo auction.

Despite recently cutting its key interest rate by 25 basis points, the RBI did not announce additional liquidity measures, leading to a rise in bond yields.

Governor Sanjay Malhotra reaffirmed that the RBI will continue monitoring liquidity conditions and take necessary steps to maintain financial stability.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.