The Reserve Bank of India Friday said it will conduct the first ever purchase auction of state government bonds for Rs 10,000 crore through open market operations (OMO) on 22 October. The result of the auction will be announced the same day.

The central bank's decision to conduct OMOs in state government loans (SDLs) as a "special case" during this financial year is to improve liquidity and facilitate efficient pricing.

Depending on market response of the first OMO purchase of SDLs, the size of the auctions may be enhanced in the subsequent auctions, the RBI said in an official release.

The RBI reserves the right to decide on the quantum of purchase of individual securities, accept bids for less than the aggregate amount, purchase marginally higher/lower than the aggregate amount, accept or reject bids.