The Reserve Bank of India (RBI) mopped up Rs 3125 crore at the auction of 14-day treasury bills yesterday. At the cut-off yield of 4.96 per cent, all the four competitive bids for a sum of Rs 3,000 crore and the lone non-competitive bid for Rs 125 crore were accepted.
The 14-day T-bills has provided to be a convenient instrument from the point of view of banks for managing their surplus funds. Consequently banks have succeeded in reducing their dependence on the call money market and this has also ensured that the calls have not declined to less than 2-3 per cent.
At the repos auction, the central bank accepted the solitary bid it received for Rs 2000 crore at the cut-off repos rate of 3.60 per cent. The fact that the RBI received over Rs 5,000 crore at the repos auction and auction of 14-day treasury bills suggests that there is still excess liquidity in the system in spite of the government having finalised a major chunk of its borrowing programme.
The Rs 300-crore auction of 91-day treasury bills sailed through at the cut-off yield of 6.60 per cent and there was no devolvement on either the banks or the primary dealers. The apex bank received nine competitive bids for Rs 365 crore and a solitary non-competitive bid for Rs 50 crore.
Four competitive bids for Rs 261.5375 crore were accepted, of which three of them got partial allotment. The sole non-competitive bidder also got partial allotment to the tune of Rs 38.4625 crore.
