G-SAP 2.0: RBI announces bond purchase worth Rs 20,000 cr on July 8

The Reserve Bank will conduct an open market purchase of government securities of Rs 1.2 lakh crore under the G-sec Acquisition Programme (G-SAP 2.0) in July-September period to support the market, the central bank said on Monday. The first purchase of government securities for Rs 20,000 crore under G-SAP 2.0 will be conducted on July 8, 2021.

The Reserve Bank will purchase government securities through a multi-security auction using the multiple price method. The Reserve Bank reserves the right to decide on the quantum of purchase of individual securities; accept bids for less than the aggregate amount; purchase marginally higher/lower than the aggregate amount; and accept or reject bids either wholly or partially without assigning any reasons.

The eligible participants must submit their bids in electronic format on the RBI Core Banking Solution (E-Kuber) system between 10:00 am and 11:00 am on July 8, 2021. Only in the event of system failure, physical bids would be accepted, the RBI said. Such physical bids should be submitted to the Financial Markets Operations Department of the RBI.

The result of the auctions will be announced on the same day and successful participants should ensure the availability of securities in their SGL account by 12 noon on July 09. The RBI said the next purchase under G-SAP 2.0 will be conducted on July 22 for Rs 20,000 crore.

The RBI has decided to undertake G-SAP 2.0 in Q2 and conduct secondary market purchase operations of Rs 1.20 lakh crore to support the market, it said.

In April, RBI Governor Shaktikanta Das had said the central bank will conduct the open market purchase of government securities of Rs 1 lakh crore under the G-SAP 1.0 in the first quarter of the financial year 2021-22. The first such auction of Rs 25,000 crore was held on April 15.