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BankingNABARD / RBI

PFC and SIDBI Cancel ₹11,500 Crore Bond Issues on Higher Yields

10 December 20251 min read
BANKING & FINANCEPFC and SIDBICancel ₹11,500Crore Bond Issueson Higher Yields10 December 2025safalsetu.com

Why in the news

Two state-run lenders pulled back bond sales because bids came in above the yields they wanted to pay.

Key facts

  • Issuers: Power Finance Corporation (PFC) and SIDBI.
  • Combined size: ₹11,500 crore.
  • Backdrop: 25-bps policy rate cut announced on 5 December.

Background

Yield is the return investors demand on a bond. Higher bids meant costlier funds for issuers, so they withdrew.

Exam angle

  • Concept: bond yields can stay firm even after a policy rate cut.

Test yourself

1. What was the combined size of the bond issues withdrawn by PFC and SIDBI?

The cancelled issues totalled ₹11,500 crore.

2. Why did PFC and SIDBI withdraw their bond issues?

Bids carried higher-than-expected yields.

3. By how many basis points did RBI cut rates in its December 5 policy review mentioned in the PFC-SIDBI bond news?

The RBI announced a 25-bps cut.

This topic is part of Daily Current Affairs 10 December 2025 (15 topics).

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