RBI to Inject ₹36,000 Crore via Government Bonds on May 30

To further ease liquidity in the financial system, the Reserve Bank of India has announced a fresh capital injection through dated government securities. This move supports its broader strategy of maintaining monetary stability and ensuring the smooth functioning of financial markets.

RBI Plans Re-Issuance of Two Government Bonds

The Reserve Bank of India is poised to inject another ₹36,000 crore into the financial system through the re-issuance of 2 dated government securities. The auction for these securities is scheduled for Friday and will be conducted by the RBI’s Mumbai Office.

According to the RBI, the government retains the vital option to absorb additional subscriptions of up to ₹2,000 crore against each security. This could potentially increase the total liquidity infusion and further strengthen the financial system.

Details of the Securities and Auction Method

The first Government Security's notified amount is worth ₹6,000 crore, with the repayment date set for 9 December 2027. The second security, with a notified amount of ₹30,000 crore, will mature on 5 May 2035.

The sale will strictly adhere to the terms and conditions outlined in the notifications issued on 26 March. The auction will utilise the multiple price method, accommodating both competitive and non-competitive bids from a range of market participants.

Bidding Timelines and Participation Norms

All bids must be submitted electronically via the Reserve Bank of India Core Banking Solution (e-Kuber system) on Friday. Non-competitive bids are to be submitted between 10:30 AM and 11 AM, while competitive bids can be placed between 10:30 AM and 11:30 AM.

Primary Dealers interested in underwriting the Additional Competitive Underwriting portion may submit bids via the e-Kuber system between 9 AM and 9:30 AM. The results will be declared on the same day, with payments due by 2 June. These stocks will be eligible for “When Issued” trading from Tuesday through Friday.

Read More:Sovereign Gold Bond: RBI Announces Premature Redemption for 2017 Series III.

Conclusion

The RBI’s planned ₹36,000 crore bond re-issuance reflects its proactive approach to maintaining adequate liquidity in the market. By offering clear auction procedures and encouraging wide participation, the central bank continues to reinforce financial system stability while aligning with its accommodative monetary stance.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

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