Document title: Conversion/Switch of Government of India Securities

Issuing authority: Reserve Bank of India, Department of Communication

Reference number: Press Release 2026-2027/1328

Date: October 14, 2026

Capital Markets and Flows – Auction Overview

The Government of India announced an auction to convert a basket of its existing securities amounting to a total face value of ₹20,000 crore. The auction will be conducted on October 19, 2026 (Monday) between 10:30 AM and 11:30 AM on the RBI’s Core Banking Solution platform, e‑Kuber. Bids are to be submitted electronically within this one‑hour window. The auction results will be disclosed on the same day, and settlement is scheduled for October 21, 2026 (Wednesday) on a T+1 basis.

Source and Destination Securities

The securities to be switched (source securities) and their respective face‑value allocations are as follows:

  • 8.26% Government Security (GS) 2027, maturing on 02 Aug 2027, ₹2,000 cr
  • 7.17% GS 2028, maturing on 08 Jan 2028, ₹3,000 cr
  • 7.06% GS 2028, maturing on 10 Apr 2028, ₹3,000 cr
  • 7.26% GS 2029, maturing on 14 Jan 2029, ₹4,000 cr
  • 6.03% GS 2029, maturing on 27 Jan 2029, ₹4,000 cr
  • 6.79% GS 2029, maturing on 26 Dec 2029, ₹4,000 cr

These will be exchanged for the following destination securities:

  • 7.19% GS 2060 (maturing 15 Sep 2060)
  • 7.41% GS 2036 (maturing 19 Dec 2036)
  • 7.23% GS 2039 (maturing 15 Apr 2039)
  • 6.64% GS 2035 (maturing 16 Jun 2035)
  • 7.50% GS 2034 (maturing 10 Aug 2034)
  • 7.57% GS 2033 (maturing 17 Jun 2033)

Bidding Procedure and Requirements

Participants must use the Switch Transaction module on e‑Kuber. Each bid must specify: (i) the face‑value amount of the source security the participant wishes to sell, (ii) the price of the source security expressed to two decimal places, and (iii) the chosen destination security together with its quoted price to two decimal places. The minimum bid size is ₹10,000 and must be in multiples of ₹10,000. Participants may submit multiple bids, provided the aggregate amount for any source security does not exceed the participant’s holdings. The price quoted for the source security must equal the FBIL closing price of that security on the preceding working day; any deviation will lead to rejection.

Auction Mechanics and Pricing

The auction is a multiple‑price auction. Successful bids will be accepted at the prices quoted by the bidders for both source and destination securities. The cut‑off price will be determined based on the destination security price; bids at or above the cut‑off are successful, while lower bids are rejected. In the event of multiple successful bids at the cut‑off price, a pro‑rata allotment will be applied. The switch ratio, defined as the price of the source security divided by the price of the destination security, will be rounded to eight decimal places. The face value of the destination security to be issued is calculated by multiplying the allotted source face value by the rounded switch ratio and then rounding down to the nearest multiple of ₹10,000. Any odd amount (less than ₹10,000) resulting from this rounding is notionally allotted and immediately bought back at the quoted clean price of the destination security; the net cash consideration for such odd amounts equals the clean price, as accrued interest on the notional allotment and buy‑back offsets each other.

Settlement and Cash Considerations

Although the conversion is intended to be cash‑neutral, a fund settlement will occur for the net accrued interest (accrued interest on the source security minus accrued interest on the destination security) for each bid. Additionally, any cash consideration arising from rounding‑off of the destination security’s face value will be added to the net accrued interest, and the combined amount will be settled on a T+1 basis. An illustrative calculation is provided in the annex: for a source face value of ₹1,000,000,000.00 priced at ₹97.50 and a destination price of ₹99.20, the switch ratio is 0.98286290, yielding a pre‑rounding destination face value of ₹982,86,290.00, which after rounding becomes ₹982,80,000.00, leaving an odd amount of ₹6,290.00. The cash consideration for this odd amount, calculated at the quoted destination price, is ₹6,240.00.

Operational Guidelines Summary

The annex outlines detailed operational steps, including the use of the e‑Kuber Switch module, bid composition, minimum bid size, price verification, auction cut‑off determination, pro‑rata allocation, rounding rules, and settlement procedures. Technical assistance for e‑Kuber issues can be obtained from the Core Banking Operations Team (email ekuberhelpdesk@rbi.org.in, phones 022‑69870466 / 022‑69870415). Auction‑related queries may be directed to the IDMD auction team (email auctionidmd@rbi.org.in, phones 022‑22702431 / 022‑22705125).

The conversion/switch auction represents a significant fiscal operation aimed at restructuring the Government of India’s debt profile, extending maturities, and managing cash flows while maintaining overall cash neutrality for participants.