RBI to auction Rs 4.73 lakh crore in govt bonds in Jan-Mar 2025

The RBI will release a weekly auction schedule during this period, listing the names of the States/UTs that have confirmed their participation.

The Central bank stated that the exact borrowing amount and details of participating States/UTs will be disclosed via press releases two to three days before each auction, depending on the requirements of the States/UTs, approval from the Government of India under Article 293(3) of the Constitution, and prevailing market conditions.

"RBI would endeavour to conduct the auctions in a non-disruptive manner, taking into account the market conditions and other relevant factors and distribute the borrowings evenly throughout the quarter," the RBI added.

The Central bank also emphasized that it retains the right to alter auction dates and amounts in consultation with the respective States/UTs.

A Government bond or Government Security (G-Sec) is a tradeable financial instrument issued by either the Central or State Governments to acknowledge their debt obligations.

These securities can be short-term (treasury bills with maturities under one year) or long-term (bonds or dated securities with maturities of one year or more).

In India, while the Central Government issues both treasury bills and bonds, State Governments only issue bonds, referred to as State Development Loans (SDLs).

G-Secs are considered risk-free, hence described as gilt-edged instruments.

A bond is essentially a debt instrument where an investor lends money to an entity (usually a corporation or government) that borrows the funds for a set period, either at a fixed or variable interest rate. Bonds are issued by companies, municipalities, states, and governments to fund various projects and activities. Bondholders are considered creditors of the issuing entity.