Mumbai, March 29 (PTI): The Reserve Bank of India has permitted the sale of government securities already contracted for purchase, from April 2, subject to certain conditions.

The central bank has also decided to shift the settlement mode of gilt transactions (carried out through Clearing Corporation of India — CCIL) to delivery versus payment-III mode (DVP-III) so that each security is deliverable or receivable on a net basis for a particular settlement cycle against the current system of gross settlement of securities under DVP-II mode.

The measures are expected to improve liquidity in the government securities market and reduce price risks. Currently, government securities can change hands only if a seller actually holds them. These measures were announced in the mid-term monetary review on November 3.