RBI conducted OMO on Monday injecting ₹50,000 crore with participants bidding ₹1.22 lakh crore, showing 2.44x oversubscription. The 6.64% GS 2035 paper received maximum bids as banks look to book profits from HTM portfolios. Another ₹50,000 crore OMO is scheduled for January 22, along with a $10 billion dollar-rupee swap on Tuesday to maintain liquidity surplus and stabilize funding rates.

RBI Injects ₹50,000 Crore Through Open Market Operations Amid Strong Participant Demand

Reserve Bank of India Injects ₹50,000 Crore into Banking System

The Reserve Bank of India (RBI) has injected ₹50,000 crore into the banking system through open market purchase auctions, witnessing an overwhelming demand from market participants who bid more than double the notified amount.

Strong Market Response to OMO

The central bank's open market operations attracted significant interest, with participants offering ₹1.22 lakh crore against the announced ₹50,000 crore.
The 6.64% GS 2035 government security paper emerged as the most sought-after instrument, receiving the maximum number of bids during the auction.

Operation Details:

Amount Notified: ₹50,000 crore
Total Bids Received: ₹1.22 lakh crore
Bid-to-Cover Ratio: 2.44x
Most Demanded Paper: 6.64% GS 2035

Upcoming Liquidity Operations

The RBI has scheduled additional liquidity support measures in the coming days to maintain adequate system liquidity:

January 22: Another OMO purchase operation for ₹50,000 crore
Tuesday: Dollar-rupee buy/sell swap operation for $10 billion

Market Participants' Perspective

"We can see from the amount offered that the response to the OMO was good. Participants would want to sell from the held to maturity (HTM) books and book profits in the last quarter of the year," explained Gopal Tripathi, head of treasury at Jana Small Finance Bank.

Current Liquidity Conditions

System liquidity has maintained a mild surplus position, averaging ₹38,728 crore in January:

Liquidity Metrics:

Current Status: Mild surplus
January Average Surplus: ₹38,728 crore

New FEMA Guarantee Regulations

The RBI has introduced comprehensive changes to foreign exchange management rules, implementing new regulations that significantly restrict cross-border guarantee arrangements between residents and non-residents:

Regulation Aspect:

Effective Framework: Foreign Exchange Management (Guarantees) Regulations, 2026
Primary Restriction: Residents barred from guaranteeing NRI credit
Scope Expansion: Includes counter-guarantees and liability portfolios
Compliance Requirement: Must align with existing FEMA and borrowing-lending regulations

Key Exemptions and Exceptions

The regulations provide several important exemptions to ensure legitimate banking and business operations continue unimpeded:

Fully collateralized authorized dealer banks
Agents of foreign shipping or airline companies
Resident-to-resident guarantee arrangements
Guarantees by authorized dealer bank of india branches outside India or in International Financial Services Centres
Arrangements complying with Foreign Exchange Management (Overseas Investment) Regulations, 2022

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