RBI To Auction Rs 2.69 Lakh Crore In T-Bills Between July And September

The Reserve Bank of India (RBI) and the Government of India have released the borrowing plan for the July–September quarter 2025. A total of Rs 2.69 lakh crore will be raised from auctions of Treasury Bills (T-bills), which are short-term Government securities (G-secs) of the Centre with a maturity of less than one year.

Every Wednesday, from July 2 to September 24, auctions will be held with the settlement taking place the following day. Notified quantities are in the range of Rs 20,000 crore and Rs 21,000 crore weekly. According to the proposal, Rs 1.26 lakh crore will be raised from 91-day T-bills, Rs 78,000 crore from 182-day T-bills, and Rs 65,000 crore from 364-day T-bills.

What are Treasury Bills

T-bills or treasury bills are zero-coupon G-secs issued by the Centre for meeting short-term financing requirements. They do not pay interest, but are discounted and returned at face value. Let's assume that an investor purchases a Rs 100 face value T-bill for Rs 98.50. Upon maturity, the government pays back Rs 100, and the difference of Rs 1.50 is the return on investment.

These bonds are not risky as they are backed by the government. They are often used by corporations, mutual funds, and banks for short-term investment. Retail investors can also buy T-bills through online platforms, such as NSE goBID or by using their demat accounts.

Auction Process and Access

T-bills are auctioned by the RBI on its e-Kuber platform. Institutional investors place competitive bids with the yield they are willing to accept. The RBI determines a cut-off yield from these bids and distributes the securities in proportion.

Small institutions and individual investors can use the facility of non-competitive bidding. In this method, the investors do not need to quote a yield, but are allotted securities at the weighted average yield as determined in the auction. The minimum lot size is typically Rs 10,000, and bids have to be in multiples of this size.

Government Flexibility and Market Relevance

While the calendar indicates borrowing schedule for the quarter, RBI retains the flexibility to alter auction dates and sizes due to shifting market conditions, government borrowing needs, or other considerations. The changes are announced by way of press releases.

Implications for Investors

For investors, T-bills offer a risk-free option to put extra money into investments for a few days. They are liquid, low-risk, and at times, pay more than ordinary savings accounts. The known auction schedule also allows institutional investors to make strategies based on market projection and interest rate fluctuations.

T-bills are an important tool to regulate government cash flows and are also employed by the central bank as a tool to regulate short-run liquidity in the market. The yields on these securities often serve as a benchmark for short-run interest rates, and they influence the price of other financial instruments.