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RBI Cancels Seven-Year G-Sec Auction After 6.6% Yield Bids

3 November 20251 min read
BANKING & FINANCERBI CancelsSeven-Year G-SecAuction After 6.6%Yield Bids3 November 2025safalsetu.com

Why in the news

RBI scrapped a government bond sale because the yields bidders demanded were too high, and accepting them would have sent a poor signal.

Key facts

  • Paper: 6.28% 2032 bond (seven-year), ₹11,000 crore; bidders wanted about 6.6%.
  • Afterwards the 10-year benchmark ended at 6.53% versus 6.57% earlier.
  • The thinly traded seven-year bond, held mostly by banks, quoted 6.46%, then 6.43%.

Why bids were weak

  • Public sector banks stayed out, carrying mark-to-market losses.
  • A technical breakout at 6.56% made dealers wary.
  • Banks avoid adding to HTM books under the April 2024 portfolio norms.

Revised norms

  • Portfolios are HTM, AFS or FVTPL; Held-for-Trading was folded into FVTPL (daily or quarterly fair valuation).
  • Maximum shift out of HTM: 5% a year.

Exam angle

  • HTM is held at amortized cost; AFS is periodically fair-valued; unrealised AFS gains go to OCI.

Test yourself

1. Which bond's auction did RBI cancel after bidders demanded about 6.6% yield?

The cancelled auction was for the ₹11,000 crore 6.28% 2032 bond.

2. Under the April 2024 RBI investment norms, how much of the HTM portfolio can be shifted in a year?

Only 5% of the HTM portfolio may be moved in a year.

3. Under the revised RBI framework, the Held-for-Trading category was merged into which category?

Held-for-Trading now sits inside Fair Value Through Profit or Loss.

This topic is part of Daily Current Affairs 1 November 2025 (15 topics).

All topics of the dayDay quizNovember 2025

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