The Reserve Bank of India has chosen Open Market Operations, or OMO, to withdraw surplus money from banks. The announcement followed Governor Sanjay Malhotra’s indication that the central bank was considering every available liquidity-management option. The report identifies October 2014 as the previous instance of a scheduled auction of this kind.

Three auctions are listed: ₹500 billion on September 17, followed by ₹250 billion each on September 21 and September 28. Securities in the first auction mature between 2029 and 2032. The report also mentions September 16 as the starting date, leaving the timing inconsistent.

The cash build-up follows banks raising $127 billion under a special foreign-exchange scheme. Exchanging those funds for rupees with the RBI added liquidity. The system’s average surplus is about ₹10.25 trillion, equivalent to roughly 3.8% of bank deposits, and has pulled overnight borrowing rates below the RBI’s intended range.

Earlier efforts through variable-rate reverse repos and dollar-rupee swaps drew limited bank participation this week. Bond sales withdraw cash for longer. Some treasury heads fear additional supply could lift yields and reduce the value of existing holdings. Some experts preferred an incremental cash reserve requirement, while the benchmark 10-year yield has already climbed 26 basis points.