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The Reserve Financial institution of India (RBI) on Wednesday (March 25, 2026) rejected all bids for Treasury payments put up for public sale as traders sought yields 0.05-0.10 share factors larger than earlier bids amid tight liquidity within the banking system, market members stated.
That is the second time in over 13 months that the RBI has rejected a bid. The earlier public sale on February 21, 2025, rejected bids for 91-day and 182-day Treasury payments.
“As a result of liquidity crunch within the banking system, traders bid for 0.05-0.10 per cent larger cut-off yields of their bids, which the RBI rejected,” stated R. Balasubramanian, head of finance at Dhanlaxmi Financial institution.
The Indian authorities points Treasury Payments (T-bills) as short-term monetary devices that act as promissory notes and assure compensation at a later date.
Banks, main sellers, particular person traders, and institutional traders sometimes take part in these auctions.
U.S. Treasury payments are short-term debt devices with maturities of as much as 364 days which are issued at a reduction to par and don’t make periodic curiosity funds.
Over the previous three weeks, the cutoff yield on Treasury payments has elevated by roughly 0.03 share factors for 91-day and 182-day intervals, and 0.06 share factors for 364-day intervals, reflecting the continued tightness in system liquidity.
The liquidity scenario within the banking system has tightened in current weeks as a consequence of outflows associated to tax and Items and Providers Tax (GST) prepayments. In response, the central financial institution injected non permanent liquidity by means of variable charge repo (VRR) auctions to help the system, which was within the pink.
The central financial institution has injected non permanent liquidity amounting to Rs 2,080 crore into the banking system by means of VRR auctions of varied durations.
Market members count on the Reserve Financial institution of India to conduct further VRR auctions within the coming days to ease liquidity pressures and stabilize short-term rates of interest.
