The Reserve Bank on Thursday permitted banks and other market participants to re-issue Government securities with the objective of developing the term repo or money market. “It has now been decided to permit re-repo of government securities, including state development loans and Treasury Bills, acquired under reverse repo,” the RBI said in a statement.
Re-repo period should not exceed the residual period of the initial repo, the statement said citing conditions for re-issue of such instrument. Re-repo of securities can be undertaken only after receipt of confirmation of first leg of repo transaction, it added.