Cash-ease: RBI to buy back Rs 15,000 crore government bonds

MUMBAI: The Reserve Bank of India will buy back Rs 15,000 crore worth of government bonds maturing next few months, a move that will help ease cash crunch in banking system, while creating fresh demand for securities.

"The repurchase by the Government of India will be undertaken to prematurely redeem the Government Stocks by utilizing its surplus cash balances," RBI said in a release on Wednesday. "The above repurchase of the Government Stocks is purely ad hoc in nature."

The repurchase will take place next Monday. There are three securities included in the buyback programme. All those will come up for repayments in April and August this year.

Under the scheme, government securities cease to exist unlike in an open market operation where RBI buys back or sell sovereign securities only to take those in its book.

Earlier in the monetary policy, the central bank has mentioned of liquidity easing measures as the banking system was running in deficit, meaning banks were borrowing more than lending to RBI.

The average daily liquidity injection (including variable rate overnight and term repos) increased from Rs 1,20,000 crore in December to about Rs 1,34,500 crore in January this year, show data from RBI.