RBI Infuses ₹24,000 Crore into Banking System via Bond Buyback

The Reserve Bank of India (RBI) has undertaken a major liquidity-supportive step by injecting ₹23,856 crore into the banking system. This was executed through the buyback of 5 government securities on June 5, as part of its broader strategy to manage liquidity conditions. The operation was carried out on behalf of the central government and comes amid consistent efforts by the RBI to maintain surplus liquidity through various monetary tools.

RBI Conducts Government Securities Buyback Worth ₹23,856 Crore

According to the central bank's notification, the RBI bought back 5 government securities: 7.27% GS 2026, 6.99% GS 2026, 6.97% GS 2026, 7.33% GS 2026, and 8.24% GS 2027.

For a total notified amount of ₹25,000 crore, the RBI received bids worth ₹27,256 crore. Out of this, bids totalling ₹23,856 crore were accepted. 

Specifically, the central bank accepted ₹11,365.783 crore worth of 7.27% GS 2026 bonds, ₹8,175.298 crore worth of 6.97% GS 2026 bonds, and ₹2,553.703 crore worth of 8.24% GS 2027 bonds. Additionally, ₹1,106.208 crore worth of 7.33% GS 2026 bonds and ₹655 crore worth of 6.99% GS 2026 bonds were also accepted.

Liquidity Measures and Systemic Surplus

In the past few months, the RBI has been actively supporting systemic liquidity through a combination of OMO purchases, USD/INR Buy/Sell swap auctions, and daily VRR (variable rate repo) auctions. These liquidity operations gained importance after the banking system slipped into deficit from mid-December last year. The recent measures have turned the banking system's liquidity into a surplus, which now stands at around ₹3 lakh crore.

Read More: RBI Cut Repo Rate by 0.50%: Eases Policy Stance to Neutral from Accommodative!

Conclusion

The RBI’s recent buyback operation reflects its ongoing commitment to maintain adequate liquidity in the banking system. As monetary conditions evolve, such interventions help ensure financial system stability and smooth market functioning.

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