Lenders in India have asked the Reserve Bank of India to make different adjustments to the government’s bond program that would make it easier to absorb the supply in the midst of market volatility, according to people who are familiar with the discussions.
Banks in a meeting with the RBI discussed an extension of the second half of the government until mid -March, instead of traditionally ending in February, said the people who asked not to be mentioned with discussing private matters.
An extensive window would enable smaller weekly issues, so that the market could better digest the offer, they added.
The central bank, the government’s debt manager, did not immediately answer an e -mail to ask for comments. The RBI usually releases the second half of the loan plan against the end-September.
The discussions follow the biggest sale of bonds in three years last month, driven by fading expectations of interest rates and renewed tax problems that initially gave rise to the proposed consumption tax reductions. The malaise also coincides with a global bond error, fed by worries of increasing debt issue and deteriorating tax discipline.
Lenders have also urged the central bank to ask the State governments to reduce the number of individual effects they issue and to relocate the auctions of the government bonds to the so-called uniform prize system, people said. According to this method, all successful bidders receive bonds at a single price set by the RBI.
In the uniform-prize auction method, banks would be spared the risk of buying government bonds at unwanted prices and a problem that has often occurred under the current so-called method with multiple price, they said.
A record of the issue of bonds with long tenor by the government of the national governments has stretched the investment capacity of banks and has forced the sovereign returns. Some recent state auctions are also shortening goals due to a weak market demand.
Some major Indian lenders have asked the central bank to reduce the range of longer borrowing in October-march borrowing, Bloomberg News reported earlier this week.
The government set the first half of borrowing at £ 8 Lakh Crore ($ 90.8 billion) in a total of £ 14.82 Lakh Crore planned for the entire fiscal year, so that approximately £ 6.8 Lakh Crore was planned for the second half of the second half, according to the Union budget.
The proceeds on the 10-year bond of India jumped in August with around 20 basic points, the sharpest monthly increase in almost three years, as a result of which the loan costs for companies imprint and the transfer of past central banking interest cuts that are aimed at supporting the economy.
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Published on September 4, 2025
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