The bank offered and succeeded in selling bills of all maturities worth 600 million rupees ($21.05 million).

The central bank sold 40 million rupees worth of 91-day paper, 495 million rupees of 182-day bills at a weighted yield of 4.46 percent and 65 million rupees worth of 364-day bills at 4.72 percent. The bank rate posted was 4.47 percent.

The central bank has been urging commercial banks to lend excess liquidity to the private sector to spur growth on the Indian Ocean island rather than put the funds in short-term government securities.

The bank has put a 20 percent cap on the amount of liquid assets lenders can invest in short-term Treasury bills, and it will tighten that cap to 18 percent in July.

Copyright Reuters, 2011