RBI announces ₹60,000 cr OMO purchase; Governor meets bank CEOs

In a move to inject liquidity into the banking system, the Reserve Bank of India (RBI) has announced measures to purchase government securities worth Rs 60,000 crore in three different tranches. After a review of current liquidity and financial conditions, the Reserve Bank has announced the open market operation (OMO) purchase auctions of "government securities for an aggregate amount of ₹60,000 crore in three tranches of ₹20,000 crore each".

These purchases will be done on January 30, 2025, February 13, 2025, and February 20, 2025.

Besides, the RBI will also conduct a 56-day variable rate repo (VRR) auction for a notified amount of ₹50,000 crore on February 7, 2025. The central bank has also announced a USD/INR buy/sell swap auction of $5 billion for six months to be held on January 31, 2025.

"Detailed instructions for each operation shall be issued separately. The Reserve Bank will continue to monitor evolving liquidity and market conditions and take measures as appropriate to ensure orderly liquidity conditions," says the RBI.

Ensure financial stability, inclusion, digital literacy: Malhotra to banks

RBI Governor Sanjay Malhotra today met with the MD & CEOs of public sector banks and select private sector banks in Mumbai. These interactions are part of the Reserve Bank's continuous engagement with the senior management of its supervised entities.

An RBI statement says the governor acknowledged the important role played by the banks in building the resilience of the domestic financial system while highlighting some of the main vulnerabilities present globally that can pose downside risks. He exhorted the banks to ensure continued financial stability, deepen financial inclusion, improve digital literacy, enhance the availability and affordability of credit, strengthen customer service and grievance redress mechanisms, and continue to invest in technology.

He also flagged the rise in digital fraud and advised banks to establish robust and proactive systems to thwart such attempts. Dwelling upon IT risk management and cyber security, the governor urged banks to have enhanced oversight over third-party service providers for mitigation of the risks emanating from them. The need for RBI and banks to work together closely was emphasised and suggestions were sought from the banks on enhancing the ease of doing business.

The meetings were also attended by Deputy Governors M. Rajeshwar Rao, T. Rabi Sankar and Swaminathan J., along with Executive Directors-in-Charge of regulation and supervision.