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RBI To Sell Bond: The Reserve Bank of India (RBI) will sell government bonds worth Rs 4.73 lakh crore on behalf of state governments and union territories in the January-March quarter of 2025. The RBI has issued a notification for this, which includes the weekly schedule of auctions to be held during the quarter and the names of the states / union territories confirming participation. According to the central bank, the actual amount of borrowing and the details of the participating states / union territories will be informed through a press release two / three days before the actual auction day and will depend on the requirement of the state governments / union territories, approval from the Government of India under Article 293 (3) of the Indian Constitution and market conditions.
How will RBI distribute funds
RBI has said that RBI will try to conduct the auction in a seamless manner keeping in view the market conditions and other necessary factors and will distribute the borrowings evenly during the quarter.
The central bank said the RBI will reserve the right to revise the auction dates and amount in consultation with the state governments/union territories.
What are government bonds
A government bond or government securities ( G-Sec ) is a tradable instrument issued by the central government or state governments. It acknowledges the debt obligation of the government. Such securities can be short term (usually called treasury bills, which have a maturity period of less than one year) or long term (usually called government bonds or dated securities, which have a maturity period of one year or more).
G-Secs carry no risk of default and are therefore called risk-free gilt-edged instruments.
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