India’s RBI scraps treasury bill sale, move to support banking liquidity

MUMBAI: India’s central bank rejected all bids at a treasury bill auction on Wednesday, its first such move in 13 months, in a step expected to support banking system liquidity ahead of the financial year-end on March 31.

The government had planned to raise 350 billion rupees ($3.72 billion) through the sale of 91-day, 182-day and 364-day treasury bills, but the Reserve Bank of India did not accept any bids.

In February 2025, the RBI had canceled only 91-day and 182-day t-bills, signalling greater comfort with the government’s cash balances

The latest move is expected boost the liquidity surplus by 350 billion rupees

Inflows from maturing t-bills are due on Friday, while there will not be any outflow

Muted demand for India’s RBI cash infusion signals need for flexible operations, analysts say

“The t-bill auction cancellation has been welcomed by the market,” said Rajeev Pawar, treasury head at Ujjivan Small Finance Bank

“System liquidity is a bit low, and given that the government has just received tax inflows it does not need additional funds immediately,” Pawar added

Traders said bids could have been at higher levels, and that the RBI did not want to spook the market around the year-end

Focus is now on the t-bill borrowing calendar for April-June, which is likely to be published by Monday evening

Traders anticipate a spike in borrowing via t-bills for the first quarter of the financial year 2027