RBI Auctions Rs 28,000 Cr Govt Securities July 24
By Business Desk
RBI announces Rs 28,000 crore government securities underwriting auction for July 24, 2026. Primary Dealers must participate via ACU mechanism.
The Reserve Bank of India (RBI) has announced an underwriting auction for government securities totaling Rs 28,000 crore, scheduled for July 24, 2026. This significant financial exercise requires Primary Dealers (PDs) to participate actively through the Additional Competitive Underwriting (ACU) mechanism, ensuring a smooth issuance process.
Understanding Underwriting in Government Securities
Underwriting auctions are a critical component of government borrowing, designed to guarantee the sale of newly issued bonds. Primary Dealers, specialized financial intermediaries, commit to purchasing a certain portion of these securities, thereby minimizing the risk of undersubscription for the government.
Specific Securities and Dealer Commitments
The upcoming auction features two distinct government securities, each with a specific maturity and notified amount. These include a new Government Security (GS) and an existing one.
- A new Government Security maturing in 2041, with a substantial notified amount of Rs 17,000 crore.
- The 7.43 per cent Government Security maturing in 2076, carrying a notified amount of Rs 11,000 crore.
Bidding Process and Underwriting Mechanics
Each Primary Dealer must fulfill a Minimum Underwriting Commitment (MUC) for the securities on offer. This commitment ensures broad participation and stability in the auction.
- For the new GS 2041, the MUC per Primary Dealer is fixed at Rs 405 crore.
- The 7.43 per cent GS 2076 has an MUC of Rs 262 crore for each Primary Dealer.
The auction itself will employ a multiple price-based method, allowing for varied bid pricing from participants. Primary Dealers are mandated to submit their bids electronically via the RBI’s Core Banking Solution, known as the e-Kuber system.
This bidding window is precisely set between 09:00 AM and 09:30 AM on the auction day. Upon successful issuance of the securities, the earned underwriting commission will be promptly credited to the respective Primary Dealers’ current accounts with the RBI.
Ensuring Market Efficiency
This structured underwriting process is vital for ensuring efficient market participation and effective liquidity management within India’s government securities market. It underpins the government’s ability to finance its operations smoothly.