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RBI to infuse Rs8,000 crore into market on 28th December

As part of the OMOs, the RBI will purchase government securities maturing in 2017 with bearing interest rate of 8.07%, 2022 with interest rate of 8.15%, and 2027 with interest rate of 8.26%

 

Mumbai: The Reserve Bank of India (RBI) would pump in Rs8,000 crore in the market on 28th December by buying government securities to ease the liquidity situation, reports PTI.

 

"Consistent with the stance of monetary policy and based on the current assessment of prevailing and evolving liquidity conditions, the Reserve Bank has decided to conduct open market operations (OMOs) by purchasing...government securities for an aggregate amount of Rs8,000 crore on 28 December 2012," RBI said in a statement.

 

As part of the OMOs, the RBI will purchase government securities maturing in 2017 (bearing interest rate of 8.07%), 2022 (8.15%), and 2027 (8.26%).

 

The OMO, it added, would be held through the multi- security auction using the multiple price method.

 

The RBI on 21st December had pumped in Rs7,912.22 crore in the system through the OMOs as against the notified amount of Rs8,000 crore.

 

OMOs are the market operations conducted by the RBI by way of sale/purchase of government securities to/from the market, with an objective to adjust the rupee liquidity conditions in the market on a durable basis.

 

If there is excess liquidity, RBI resorts to sale of securities and sucks out the funds from the financial system.

 

Similarly, when the liquidity conditions are tight, the RBI buys securities from the market, thereby, releasing liquidity into the market.

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Federal Bank ups deposit rates by up to 0.5%

Under the revised slabs, Federal Bank will pay 9% per annum for a deposit of over one year but under 3 years maturity, up from the earlier 8.75%

Mumbai: Kerala-based Federal Bank has raised its interest rate offering on select deposit buckets by up to 0.5%, reports PTI.

 

Under the revised slabs, the bank will pay 9% per annum for a deposit of over one year, but under 3 years maturity, up from the earlier 8.75%, it said in a statement.

 

Similarly, it has upped the rate of interest for the 91 days to 119 days maturity to 7.5% from the 7% earlier, it said.

 

The revised rates, effective from 24th December vary according to the maturities.

 

Under the new structure, the bank will pay 5% per annum for a 7 days to 45 days tenure, 7% for 46 days to 90 days bracket and 8.50% for the 181 days to less than a year maturity, it said.

 

For rupee term deposits by non-resident Indians, the rates have been fixed at 9% for the one to three year deposit and 8.75% if the deposit is above 3 years, it said.

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