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Government to repurchase Rs 20K crore worth G- Secs.

THE Centre has decided to repurchase Rs 20,000 crore worth of government securities ( G- Secs) in a bid to infuse liquidity into the banking system that had been facing severe fund constraints over the last couple of weeks. This may enable some banks to adjust their asset- liability mismatches and start disbursing funds for sanctioned loans.

In consultation with the Reserve Bank of India ( RBI), the Centre has decided to repurchase G- Secs worth Rs 10,000 crore as early as Friday, the funds of which would flow into the banking system on Monday ( June 21) next.

In a notification on Wednesday, RBI announced repurchase of 12.25 per cent G- Secs of 2010, 11.30 per cent stock of 2010 and 6.57 per cent stock of 2011 for their ( the Centre and RBI) cash management operations.

" The repurchase of the government stocks will be up to a nominal amount of Rs 20,000 crore to be undertaken in one or multiple tranches. The repurchase operations are purely of ad hoc nature and will be funded through the current surplus cash balances of the government," it said.

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Publication:Mail Today (New Delhi, India)
Date:Jun 17, 2010
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