RBI · Reserve Bank of India ·

RBI announces OMO Sale of Government of India Securities

Distilled Policy Brief

  • The Reserve Bank of India has decided to conduct Open Market Operation (OMO) sale auctions of Government of India securities for an aggregate amount of ₹1,00,000 crore in three tranches.
  • Eligible participants are required to submit electronic bids through the Reserve Bank of India Core Banking Solution (E-Kuber) system.

🎯 Prelims High-Yield Examination Points

Understand Open Market Operations (OMO) as a indirect quantitative monetary policy tool used by the RBI to regulate money supply by buying or selling government securities.

⚖️ Mains Analytical & Syllabus Linkages

Analyze how Open Market Operations (OMO) sales help the central bank absorb excess liquidity, curb demand-pull inflation, and align short-term interest rates.

🎯 UPSC Prelims Practice Drill

Economy

With reference to Open Market Operation (OMO) sale auctions conducted by the Reserve Bank of India (RBI), consider the following statements: 1. OMO sales are undertaken by the RBI to manage liquidity conditions in the financial system. 2. Eligible participants submit their bids electronically using RBI's Core Banking Solution, the E-Kuber system. 3. Physical submission of bids is permitted as a standard alternative to electronic submission. Which of the statements given above are correct?

  • [A] 1 and 2 only
  • [B] 2 and 3 only
  • [C] 1 and 3 only
  • [D] 1, 2 and 3
▶ Reveal Official Answer & Analytical Explanation
✓ Correct Option: [A] 1 and 2 only

Statements 1 and 2 are correct: RBI conducts OMO sales to adjust evolving liquidity conditions, and participants must submit electronic bids via the E-Kuber system. Statement 3 is incorrect because physical bids are not a standard alternative; they are accepted only in the event of a system failure.

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🏛️ Historical Twin PYQ Anchor (2021)

UPSC Prelims 2021

Consider the following statements regarding the "National Clean Air Programme (NCAP)": 1. It is implemented by the Ministry of Environment, Forest and Climate Change. 2. Central Pollution Control Board acts as the sole regulatory executive body.

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Examiner Trap Takeaway: UPSC swapped Central Pollution Control Board role with State Pollution Control Boards for state-level monitoring.

📚 Static Syllabus & Constitutional Linkages

Open Market Operations & Core Banking Platform: OMOs involve direct buying and selling of government bonds by the central bank to adjust liquidity. RBI executes government debt auctions and liquidity operations through its proprietary platform, E-Kuber.