The Reserve Bank of India (RBI) on Friday issued draft guidelines for lending and borrowing of government securities. It is aimed at improving liquidity and price discovery in the market.
The central bank had first announced the borrowing and lending of government securities earlier this month, while announcing monetary policy.
“Comments on the Draft Directions are invited from banks, market participants and other interested parties by March 17, 2023,” the RBI said in a statement on Friday.
RBI Governor Shaktikanta Das on February 8 proposed the borrowing and lending of government securities to improve liquidity and price discovery in the securities market.
“This will provide investors an avenue to deploy their ideal securities, enhance portfolio returns, and facilitate wider participation,” he had said at that time.