The Reserve Bank has decided to revise the existing liquidity arrangements to ensure flexibility and transparency in liquidity management operations.

The RBI will conduct 14 day term repo auctions 4 times from Sept. 5, 2014 during a reporting fortnight, i.e., on every Tuesday and Friday, between 11-11.30 AM for an amount equivalent to one-fourth of 0.75 per cent of NDTL in each auction.

In the transition period, to ensure that the access to liquidity under these term repos remains equivalent to 0.75% of NDTL at all times, 3-day/4-day variable rate term repo auctions of varying amounts will also be conducted between September 5 to 12, 2014.

For overnight variable rate repo auction, RBI will decide auction amount based on an assessment of the liquidity conditions as well as Government cash balances available for auction for the day, and will be announced around 2.30 PM. The Reserve Bank may decide to exercise a greenshoe option above the notified amount based on the evolving liquidity conditions during the day.

There is no restriction on overnight fixed rate reverse repo quantity, RBI said.

For overnight variable rate reverse repo auctions Reserve Bank will announce the notified amount during the day and conduct the auction between 3-3.30 PM. Individual banks can draw funds equivalent up to excess SLR+2% below SLR.

The Reserve Bank may announce special variable rate short term repo/reverse repo auctions at short notice to take care of fast-changing liquidity conditions at any time during the day.

Further, apart from addressing day-to-day liquidity requirements arising out of frictional factors, the Reserve Bank will also manage liquidity movements of a more durable nature through open market operations (including those conducted on the NDS-OM platform) and forex operations.