Reserve Bank of India’s Switch Auction | 26 Feb 2026

Source: BS

The Reserve Bank of India (RBI) has announced a Rs 25,000 crore switch auction of Government Securities (G-Secs) to manage debt maturity and reduce redemption pressure in FY27, after earlier conducting two such operations totaling Rs 84,804 crore.

• Redemption pressure is defined as the financial burden on the government when a large volume of bonds or debt instruments mature at the same time, requiring repayment or refinancing.
• Switch Auction: It is a debt management tool used by the RBI to help the government manage its repayment burden. In this process, the government replaces short-term bonds that are nearing maturity with new long-term bonds, thereby postponing repayment obligations. 
• Shifting the Maturity Profile: The recent Rs 25,000 crore switch auction aims to reduce the heavy redemption pressure in FY27, when Rs 5.47 lakh crore worth of bonds are due. 
  • By extending maturities beyond FY32, the RBI helps smooth the government’s debt profile, reduce refinancing risks, and maintain fiscal stability.
• Effective Fiscal Management: Given that the government's gross market borrowing is already budgeted at a substantial 17.2 lakh crore rupees, utilizing switch auctions helps to seamlessly ease the maturity profile and manage repayment obligations without requiring immediate, large-scale cash liquidity.