RBI to auction govt bonds worth Rs 32,000 crore on Jan 2
New Delhi, Dec 29
The government of India on Monday announced the sale of "6.48 per cent Government Security 2035" for a notified amount of Rs 32,000 crore through price-based auction using the multiple price method.
The auction will be conducted by the Reserve Bank of India's Mumbai Office on January 2.
The Government will have the option to retain additional subscription up to Rs 2,000 crore against the security, according to a Finance Ministry statement.
Up to 5 per cent of the notified amount of the sale of the security will be allotted to eligible individuals and institutions as per the Scheme for Non-Competitive Bidding Facility in the Auction of Government Securities, the statement said.
Both competitive and non-competitive bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber system) on January 2, 2026.
The non-competitive bids should be submitted between 10:30 a.m. and 11:00 a.m., and the competitive bids should be submitted between 10:30 a.m. and 11:30 a.m., the statement explained.
The result of the auction will be announced on January 2, and payment by successful bidders will be on January 5.
The Security will be eligible for "When Issued" trading in accordance with the guidelines on 'When Issued transactions in Central government Securities' issued by the Reserve Bank of India vide circular dated July 24, 2018, as amended from time to time.
Governments sell bonds to borrow money from investors, essentially taking loans to fund public spending like infrastructure, social programs, and to cover budget deficits, acting as a low-risk way for citizens or institutions to lend to the government in exchange for regular interest and principal repayment, thus financing national needs without immediately raising taxes.
These bonds are considered low-risk investments since they are backed by the government and are considered safe because of their relatively low risk. Government bonds typically pay low interest rates.
— IANS
Reader Comments
A 6.48% return for a 10+ year bond seems decent for risk-averse investors like my parents. Safer than the stock market volatility. Will check if we can put in a non-competitive bid.
Rs 32,000 crore is a huge amount! While bonds are necessary, I hope there is transparency in how this borrowed money is deployed. We've seen cost overruns in projects before. The intent is good, but execution is key.
Interesting to see the detailed process. The "When Issued" trading provision adds some liquidity even before settlement. Shows the sophistication of India's debt markets.
As a small investor, the 5% non-competitive quota is a good initiative. Allows common people to participate alongside the big institutions. More awareness is needed about how to apply on the E-Kuber system though.
Financing development through domestic savings is the right approach. Better than printing money and causing inflation. Hope this borrowing helps in job creation.
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.