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RBI holds open market operations
Why is it in the news?
- The RBI has conducted an open market operations (OMOs).
- Under the OMOs, RBI purchased ₹10,000-crore worth long term government securities and sold ₹6,825 crore of short-term securities.
More in the news
- The RBI had announced simultaneous purchase and sale of government securities under OMOs for ₹10,000 crore each.
- The exposure of a lender to all borrowers must not exceed ₹50 lakh at any given point.
- This is to protect consumer interest, on a peer-to-peer lending (P2P) platform.
- A lender investing over Rs. 10 lakh across P2P platforms will produce a certificate to P2P platforms from a chartered accountant certifying a minimum net worth of Rs. 50 lakh.
- What is Open Market Operations (OMO)?
(1) It is a major monetary policy instrument of the RBI.
(2) It refers to the buying and selling of eligible securities or first class bills (govt. securities) by the RBI.
(3) Buying of securities in the open market increases the supply of credit.
(4) Selling of securities reduces the volume of money with the public.
Source
The Hindu.