RBI to conduct third auction of SDLs via open market operations next week

Photo | Bloomberg

The Reserve Bank of India will conduct the third auction of state developments loans (SDLs) aggregating Rs 10,000 crore under the Open Market Operations (OMO) on December 23.

The Reserve Bank has conducted two OMOs in SDLs covering all states/UTs for a cumulative amount of Rs 20,000 crore. The first-ever auction under OMOs in SDLs was conducted in October and the second in November.

"It has now been decided to conduct another purchase auction of SDLs under Open Market Operations (OMOs) for an aggregate amount of Rs 10,000 crore on December 23, 2020," it said in a statement.

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

The RBI had decided to conduct OMOs in SDLs as a "special case" during the current financial year with an aim to improve liquidity and facilitate efficient pricing.

At present, SDLs are eligible collateral for Liquidity Adjustment Facility (LAF) along with T-bills, dated government securities and oil bonds.

The statement further said the RBI reserves the right to decide on the quantum of purchase of individual securities and accept bids for less than the aggregate amount.

The result of the auction will be announced on December 23 itself.


(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)


Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel