RBI to auction bills worth Rs 1 lakh cr tomorrow

The RBI today said it will auction 35-days and 49-days Cash Management Bills worth Rs 1,00,000 crore on January 13 to mop up extra liquidity from the system post demonetisation.
"The Reserve Bank of India will conduct auctions of 35 days and 49 days Government of India Cash Management Bills under the Market Stabilisation Scheme (MSS) for a notified amount of Rs 50,000 crore each on January 13, 2017 using 'Multiple Price Auction' method," the central bank said in a notification.
"The Cash Management Bills will have the generic character of Treasury Bills," it added.
After the withdrawal of the legal tender of the Rs 500/1,000 denomination notes with effect from November 9, there has been a surge in deposits with the banks, the RBI had said.

There has been a significant increase of liquidity in the banking system that is expected to continue for some time.
MSS bonds are issued with the objective of providing the central bank with a stock of securities with which it can intervene in the market for managing liquidity. These securities are not issued to meet the government's expenditure.