RBI to conduct ₹30,000 crore government securities buyback on September 3

The Reserve Bank of India (RBI) said on Friday it would conduct a buyback auction of government securities worth ₹30,000 crore on September 3, between 10:30 AM and 11:30 AM through the E-Kuber platform. The operation aims to address the substantial surplus liquidity currently circulating in the banking system.

According to the RBI's notification, the securities eligible for buyback include 7.33 per cent Government Securities maturing in 2026, 5.74 per cent GS 2026, 8.15 per cent GS 2026, and 8.24 per cent GS 2027. The central bank has not stipulated individual amount limits within the overall ₹30,000 crore ceiling, allowing flexibility in the auction process.

The RBI will conduct the auction using multiple price methods, a standard procedure for such operations. The buyback comes as the central bank intensifies its efforts to absorb excess liquidity from the financial system, which has remained in significant surplus.

To tackle the buildup of liquidity, the RBI has already conducted 21 variable rate reverse repo (VRRR) auctions in August alone. These operations allow banks to park excess funds with the central bank, effectively removing liquidity from circulation while generating returns for participating institutions.