The Reserve Bank of India (RBI) on Monday accepted bids worth Rs 25,000 crore in the second tranche of its ongoing open market operation (OMO) sales programme as the central bank continued efforts to absorb surplus liquidity from the banking system.

The auction received strong investor participation, with total bids amounting to Rs 84,982 crore, more than three times the notified amount, indicating sustained demand for government securities despite the RBI’s liquidity-tightening measures.

According to the auction results, the RBI accepted bids worth Rs 11,512 crore for the 6.10 per cent Government Security (GS) 2031 and Rs 8,758 crore for the 7.95 per cent GS 2032.

The central bank also accepted Rs 2,300 crore of the 6.75 per cent GS 2029, Rs 2,250 crore of the 7.17 per cent GS 2030 and Rs 180 crore of the 7.17 per cent GS 2028. However, it did not accept any bids for the 8.28 per cent GS 2027.

The latest OMO sale comes as liquidity conditions in the banking system remain comfortable. RBI data showed that surplus liquidity stood at around Rs 6.05 lakh crore as of September 20.

OMO sales are a monetary policy tool through which the central bank sells government securities to banks and other market participants to absorb excess funds from the financial system. The move helps the RBI manage short-term interest rates and overall liquidity conditions.

The current liquidity absorption exercise is part of the RBI’s broader plan to conduct OMO sales worth Rs 1 lakh crore in three phases. The first tranche of Rs 50,000 crore was conducted on September 17, followed by the second tranche of Rs 25,000 crore on September 21.

The final tranche, also worth Rs 25,000 crore, is scheduled for September 28.

Market participants said the RBI’s move reflects its intention to gradually normalise liquidity conditions following a sustained build-up of surplus cash in the banking system.