India’s Central Bank Sets Minimum Underwriting Commitments of ₹2.86 Billion and ₹3.81 Billion for 2065 and 2040 Bonds

RBI Enforces Minimum Underwriting Commitment for Long-Term Government Bonds

The Reserve Bank of India (RBI) has set minimum underwriting commitments as part of its debt issuance mechanism for two key long-duration bonds maturing in 2065 and 2040. The underwriting commitment for the 2065 bond stands at ₹2.86 billion, whereas for the 2040 bond, the commitment is higher at ₹3.81 billion.

These commitments oblige primary dealers (PDs) to subscribe to a minimum amount in case of undersubscription during auctions. This underwriting mechanism aims to facilitate the government’s ₹32,000 crore borrowing program, ensuring liquidity and smooth auction processes.

The measure reaffirms RBI’s role in maintaining market confidence and orderly functioning of India’s government securities market. It also underpins India’s fiscal management strategy amidst evolving macroeconomic challenges.

Market participants view this as a well-calibrated approach to secure adequate subscription, protect yields, and maintain investor interest in long-tenured sovereign bonds critical for financing infrastructure and developmental priorities.

Key Highlights:

Minimum underwriting commitment: ₹2.86 billion for 2065 bonds.

Minimum underwriting commitment: ₹3.81 billion for 2040 bonds.

Commitment ensures primary dealers back government securities in case of under-subscription.

Part of RBI’s plan to raise ₹32,000 crore through bond auctions.

Supports market liquidity, investor confidence, and yield stability.

Critical for financing India’s long-term infrastructure and development needs.

Source: Reuters, RBI official notifications, Economic Times (2025)