RBI to auction Government Securities worth Rs 28,000 crore on May 29

The RBI will conduct an underwriting auction for Government Securities worth Rs 28,000 crore on May 29. The auction involves two securities, 6.68% GS 2040 and 7.43% GS 2076, with specified commitments for Primary Dealers.

The Reserve Bank of India will conduct an underwriting auction for the sale and re-issue of Government Securities worth Rs 28,000 crore on May 29.

"Government of India has announced the sale (re-issue) of Government Securities, as detailed below, through auction to be held on May 29, 2026 (Friday)," the RBI stated in a press release.

Auction Details

As per the extant scheme of underwriting commitment notified on November 14, 2007, the amounts of Minimum Underwriting Commitment (MUC) and the minimum bidding commitment under Additional Competitive Underwriting (ACU) auction, applicable to each Primary Dealer (PD), on offer include 6.68 per cent GS 2040 with a notified amount of Rs 17,000 crore.

For this specific security, the MUC per primary dealer stands at Rs 405 crore, and the minimum bidding commitment per primary dealer under the ACU auction stands at Rs 405 crore.

The second security scheduled for the auction is 7.43 per cent GS 2076, which carries a notified amount of Rs 11,000 crore. The Reserve Bank of India fixed the MUC per primary dealer at Rs 262 crore, while the minimum bidding commitment per primary dealer under the ACU auction stands at Rs 262 crore.

Auction Process and Settlement

"The underwriting auction will be conducted through multiple price-based method on May 29, 2026 (Friday). PDs may submit their bids for ACU auction electronically through Reserve Bank of India Core Banking Solution (e-Kuber system) between 09:00 A.M. and 09:30 A.M. on the day of underwriting auction," the RBI press release added.

The central bank also clarified the settlement process for the participating primary dealers regarding their financial compensation for the event stating: "The underwriting commission will be credited to the current account of the respective PDs with RBI on the day of issue of securities."

Role of Underwriting and Primary Dealers

Underwriting of government securities is a critical function performed by primary dealers to ensure smooth borrowing operations by the government. In this system, primary dealers commit to subscribing to unsold portions of government bond issuances, thereby assuring full subscription.

The ACU mechanism allows the government to allocate additional underwriting amounts through a competitive bidding process, where the commission rate is determined based on market demand.

The RBI's announcement comes as part of its routine government securities issuance calendar, which is a key instrument for managing the fiscal requirements of the government and influencing liquidity in the financial system.

Primary dealers, a select set of financial institutions authorised by the RBI, play an essential role in underwriting and distributing these securities in the secondary market.

(Except for the headline, this story has not been edited by Asianet Newsable English staff and is published from a syndicated feed.)