The Reserve Bank of India (RBI) has announced that it will conduct an Open Market Operation (OMO) to purchase government securities worth ₹20,000 crore on April 22, 2025. This decision follows an earlier press release issued on April 1, 2025.
OMO means the RBI either buys or sells government securities (bonds) in the open market. If RBI buys bonds, it gives money to banks – this increases liquidity (cash) in the system. If RBI sells bonds, it takes money from banks – this reduces liquidity. In this case, RBI is buying bonds, which means it is trying to increase liquidity (money supply) in the economy.
The RBI will carry out this OMO purchase through a multi-security auction using the multiple price method. Under this method, different securities are offered, and participants can bid separately for each, with the final prices based on the bids received.
The government bonds that the RBI plans to buy include five types of securities with different interest rates and maturity dates. These are:
- 6.10% GS 2031 maturing on July 12, 2031 (ISIN: IN0020210095)
- 7.26% GS 2032 maturing on August 22, 2032 (ISIN: IN0020220060)
- 7.50% GS 2034 maturing on August 10, 2034 (ISIN: IN0020040039)
- 8.30% GS 2040 maturing on July 2, 2040 (ISIN: IN0020100031)
- 9.23% GS 2043 maturing on December 23, 2043 (ISIN: IN0020130079)
The total purchase amount is ₹20,000 crore, but there is no specific allocation mentioned for each security.
The RBI has also clarified that it holds the right to:
- Decide how much of each bond it wants to purchase.
- Accept bids for less than the total amount.
- Buy slightly more or less than ₹20,000 crore due to rounding adjustments.
- Reject any or all bids without giving any reason.
Who Can Participate and How?
Eligible market participants are required to submit their bids electronically through the RBI’s E-Kuber system between 9:30 AM and 10:30 AM on April 22, 2025. Physical bids will only be accepted in case of a system failure and must be submitted to the Financial Markets Operations Department using the prescribed format available on the RBI website.
Result and Settlement
The results of the auction will be declared the same day. Successful bidders must ensure that the purchased securities are available in their SGL (Subsidiary General Ledger) account by 12 noon on April 23, 2025 for settlement.
By buying bonds, RBI will inject ₹20,000 crore into the banking system. This helps in improving liquidity (more cash flow in the economy) and supports credit growth. It helps in stabilizing interest rates. It’s a tool to manage the money supply in the economy.
