RBI’s Rs 32,000 Cr Bond Auction Is Here, Should You Invest?

Credit:IANS

New Delhi: The Finance Ministry has announced that on August 1, 2025, the Reserve Bank of India (RBI) will auction government bonds worth Rs 32,000 crore in Mumbai to help manage government borrowing. The sale will take place in two parts: Rs 16,000 crore of "6.68 percent Government Security 2040" and Rs 16,000 crore of "6.90 percent Government Security 2065." The government may accept an extra Rs 2,000 crore for each bond if demand is high, potentially increasing the total auction size to Rs 36,000 crore.

Bids will be accepted electronically through RBI's E-Kuber system with non-competitive bids (for retail investors and small institutions) allowed between 10:30 and 11:00 AM, and competitive bids (for large investors) between 10:30 and 11:30 AM on auction day. Up to 5 percent of the bonds will be reserved for eligible individuals and institutions via a non-competitive bidding scheme.

Auction results will be announced on August 1, and successful bidders must make payments by August 4. These bonds will be eligible for “When Issued” trading, meaning they can be traded before settlement, as per RBI guidelines.

Government bonds are loans the government takes from investors, which pay interest over time and are considered very safe because the government backs them. Because they are low risk, these bonds usually offer lower interest rates compared to other investments. Bonds like these help the government raise funds to support its spending and financial needs.