The Reserve Bank of India (RBI) today announced that it would purchase government securities worth Rs 12,000 crore through open market operations (OMOs) on Friday to ease the current liquidity crisis.

"Consistent with the stance of monetary policy and based on the current assessment of prevailing and evolving liquidity conditions, RBI has decided to conduct Open Market Operations by purchasing government securities for an aggregate amount of Rs 12,000 crore on February 24, 2011, through a multi-security auction...," the apex bank said in a statement.

Also Read   Related Stories News Now - Rupee up 9 paise in early trade - India has to target double-digit growth: FM - End in sight to slide in Sensex earnings - India's hottest stock? - Sensex at 7-month closing high, RIL up 3% - Home buying: China shows the way to RBI

Also Read   Related Stories News Now - Markets end lower ahead of May F&O expiry - Parsvnath posts Rs 23 cr loss in Q4 - Educomp net down 57% at Rs 61 cr in Jan-Mar qtr - DLF Q4 net plunges 39% to Rs 211 cr - Provogue Q4 net profit down 71% at Rs 1.81 cr More

The auction will be in four price methods -- government securities (G-Sec) maturing in 2017 with a coupon of 8.07%, G-Secs maturing in 2021 with a coupon rate of 8.79%, G-Secs maturing in 2027 with a 8.28% coupon rate and G-Secs maturing in 2032 with also a 8.28% coupon rate.

"There is an overall aggregate ceiling of Rs 12,000 crore for all the securities in the basket put together. There is no security-wise notified amount," the RBI said.

RBI Deputy Governor Subir Gokarn had earlier said liquidity is likely to be under pressure for some more time amid factors like advance tax payment. He had said there is still scope for OMOs to lighten the pressure on liquidity.

The RBI has said in the past that the liquidity deficit has exceeded its target of 1% of net demand and time liabilities (NDTL).

The apex bank has purchased government securities worth over Rs 92,000 crore from the money markets in ten instalments in the past two months as part of efforts to infuse liquidity into the system.

OMOs are the "first preference" of the RBI while injecting liquidity and there is an opportunity to raise up to Rs 2.74 lakh crore through the window as banks' government bond holdings stand at 29%, 5% over the prescribed SLR cap of 24%.

New Ipad Application :Business Standard's all new IPad App Click here to download for free Other Stories      - Markets end lower ahead of May F&O expiry - Parsvnath posts Rs 23 cr loss in Q4 - Educomp net down 57% at Rs 61 cr in Jan-Mar qtr - DLF Q4 net plunges 39% to Rs 211 cr - Provogue Q4 net profit down 71% at Rs 1.81 cr

Tags : RBI | govt securities | G-sec | Reserve Bank | open market operations   Read Business news in  Advertisements -  India's no. 1 Property Site. Click here to know more -   -  Help a Child Achieve her. Click to know more -  Watch The Film Here. Click here to know more.. -  Learn How One City is Running on FOOD SCRAPS. -  1 billion in saving for Unilever without any tangles. -  One Partnership Endless Possibilities. Click here to know more -  Helping doctors detect diseases earlier, saving costs & extending lives. -  Which is the best plan for your daughter -  Check out the TRUE COLOURS of your Stocks, Now for FREE! -  One of the leading business schools in the world.Know More -  2 Lac Apartments, 1 Lac House / Plots. Click here