Government Bonds: RBI to Inject an Additional Rs 36,000 Crore into the Financial System
RBI to Inject Additional Rs 36,000 Crore into Financial System
The Reserve Bank of India (RBI) has announced plans to inject an additional Rs 36,000 crore into the financial system via the re-issuance of two government securities. This infusion is scheduled to take place through an auction on Friday, May 30, with proceedings managed by the RBI’s Mumbai Office.
Details of the Securities
The first government security has a notified amount of Rs 6,000 crore, with maturity set for December 9, 2027. The second security, significantly larger at Rs 30,000 crore, will be due for repayment on May 5, 2035. The RBI has indicated that the auction will adhere to the terms outlined in the relevant ‘Specific Notification’ and the General Notification (F.No.4(2)–B(W&M)/2018), dated March 26, 2025.
Potential for Increased Liquidity
Moreover, the government has the discretion to accept additional subscriptions of up to Rs 2,000 crore for each security. This could potentially amplify the overall capital influx, further improving liquidity within the financial system.
Auction Process and Submission Guidelines
The RBI detailed that the auction will employ a multiple price system. Both competitive and non-competitive bids must be submitted electronically via the Reserve Bank of India Core Banking Solution (e-Kuber system) on the specified date, May 30, 2025. The timeline for submissions is as follows: non-competitive bids should be filed between 10:30 a.m. and 11:00 a.m., while competitive bids can be placed from 10:30 a.m. to 11:30 a.m.
Auction Outcome and Payment Schedule
The results of the auction will be made public on the same day, and successful bidders will be required to make payments by June 2, 2025 (Monday). In accordance with RBI guidelines, primary dealers looking to underwrite the Additional Competitive Underwriting segment can submit their bids via the e-Kuber system between 9 a.m. and 9:30 a.m. on Friday.
