RBI accepts lower bond purchase amount in first FY26 OMO auction

Mumbai: The Reserve Bank of India (RBI) accepted a lower-than-notified amount at its open market operations to purchase bonds on Monday even as market participants sought to sell securities worth twice the announced offer on the table. This probably indicates the central bank is comfortable with the current liquidity.

RBI accepted bids worth ₹19,203 crore at this OMO, lower compared to the notified amount of ₹25,000 crore. RBI had received bids worth ₹50,369 crore. This is first FY26 OMO auction where RBI accepted a lower amount. RBI's steps have helped lift system liquidity. Government bonds maturing in 2029, 2032, 2033, 2034 and 2036 were part of Monday's auction. The 10-year benchmark yield closed at 6.24% on Monday. "The auction cut-off prices were almost in line with market levels, for the semi-liquid 2029 and 2033 maturities. Since 2025, banks have offloaded ₹5 lakh crore of bonds. Following this liquidation, their willingness to sell has diminished," said VRC Reddy, head of treasury at Karur Vysya Bank.

"It appears most stock from HTM that could be sold in OMOs has reached a limit or is near it. Most banks don't have excess and they are selective..." said Ritesh Bhusari, joint GM, South Indian Bank.