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RBI allows oil bonds as collateral for liquidity auctions

Reuters  |  MUMBAI 

(Reuters) - The Reserve Bank of has relaxed its liquidity auction rules by expanding the basket of securities that will be accepted as collateral for the repo, reverse repo and marginal standing facility tenders, it said on Friday.

The RBI is making bonds eligible for the liquidity auctions, adding that there will be no margin requirement on reverse repo auctions where the central bank has to give securities against surplus money deposited by banks.

Banks have been tendering up to about 4 trillion rupees ($58 billion) in reverse repo auctions with the RBI which led to concerns that the central bank may soon run out of to offer to banks if the deposits shoot up sharply.

That is likely to have prompted the RBI to expand the basket of collateral to bonds as well, dealers said. The changes will be effective from Monday.

Indian banks have been flushed with billions of dollars of deposits after the government announced withdrawal of high value currency notes to unearth black money.

For the full release, see: http://bit.ly/2fyBV2n

(Reporting by Suvashree Dey Choudhury)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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RBI allows oil bonds as collateral for liquidity auctions

MUMBAI (Reuters) - The Reserve Bank of India has relaxed its liquidity auction rules by expanding the basket of securities that will be accepted as collateral for the repo, reverse repo and marginal standing facility tenders, it said on Friday.

(Reuters) - The Reserve Bank of has relaxed its liquidity auction rules by expanding the basket of securities that will be accepted as collateral for the repo, reverse repo and marginal standing facility tenders, it said on Friday.

The RBI is making bonds eligible for the liquidity auctions, adding that there will be no margin requirement on reverse repo auctions where the central bank has to give securities against surplus money deposited by banks.

Banks have been tendering up to about 4 trillion rupees ($58 billion) in reverse repo auctions with the RBI which led to concerns that the central bank may soon run out of to offer to banks if the deposits shoot up sharply.

That is likely to have prompted the RBI to expand the basket of collateral to bonds as well, dealers said. The changes will be effective from Monday.

Indian banks have been flushed with billions of dollars of deposits after the government announced withdrawal of high value currency notes to unearth black money.

For the full release, see: http://bit.ly/2fyBV2n

(Reporting by Suvashree Dey Choudhury)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

image
Business Standard
177 22

RBI allows oil bonds as collateral for liquidity auctions

(Reuters) - The Reserve Bank of has relaxed its liquidity auction rules by expanding the basket of securities that will be accepted as collateral for the repo, reverse repo and marginal standing facility tenders, it said on Friday.

The RBI is making bonds eligible for the liquidity auctions, adding that there will be no margin requirement on reverse repo auctions where the central bank has to give securities against surplus money deposited by banks.

Banks have been tendering up to about 4 trillion rupees ($58 billion) in reverse repo auctions with the RBI which led to concerns that the central bank may soon run out of to offer to banks if the deposits shoot up sharply.

That is likely to have prompted the RBI to expand the basket of collateral to bonds as well, dealers said. The changes will be effective from Monday.

Indian banks have been flushed with billions of dollars of deposits after the government announced withdrawal of high value currency notes to unearth black money.

For the full release, see: http://bit.ly/2fyBV2n

(Reporting by Suvashree Dey Choudhury)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

image
Business Standard
177 22

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