The government has proposed to buyback 24 illiquid Government of India securities of Rs 80,000 crore (Rs 800 billion) face value from banks and public financial institutions.

"The buyback will be done through price-based auction and the first transaction is likely to happen by the end of this quarter (June)," Union Finance Secretary S Narayan told newspersons after meeting chiefs of banks and financial institutions in Mumbai on Friday.

This is a voluntary and transparent buyback programme where the premium would be paid in cash and for the balance amount, the government would re-issue fixed rate securities with the tenure varying between 5-20 years, he said.

This scheme would help banks to improve their balance sheets and make provisions for non-performing assets, he said, adding these entities would also get tax benefits.

Narayan said this buyback would also help the government to reduce the interest burden.