Government Stock - Auction Results: Cut-off
Distilled Policy Brief
- The Reserve Bank of India successfully auctioned government securities worth 33,000 crore rupees across four tranches, including a dedicated 3,000 crore rupee tranche of 7.50 percent Sovereign Green Bonds maturing in 2056.
- The auction recorded nil devolvement on Primary Dealers, indicating robust market demand and complete absorption of the offered debt by institutional investors at the established cut-off yields.
- Sovereign Green Bonds are structured as dated securities with long tenors to align public borrowing with the long-term gestation periods of green infrastructure projects.
🎯 Prelims High-Yield Examination Points
Sovereign Green Bonds (SGrBs) are issued as dated securities, qualify for Statutory Liquidity Ratio (SLR) purposes, and can be traded in the secondary market, with the Reserve Bank of India managing the issuance.
⚖️ Mains Analytical & Syllabus Linkages
The strategic utilization of ultra-long-term Sovereign Green Bonds (maturing in 2056) highlights India's commitment to institutionalizing green finance, reducing the carbon intensity of the economy, and establishing a sovereign yield curve for climate-aligned assets.
🎯 UPSC Prelims Practice Drill
With reference to Government Securities (G-Secs) and Sovereign Green Bonds (SGrBs) in India, consider the following statements: 1. Sovereign Green Bonds are structured as dated securities with long tenors to align public borrowing with the long-term gestation periods of green infrastructure projects. 2. A status of 'nil devolvement on Primary Dealers' in a G-Sec auction indicates complete market absorption of the notified amount by institutional investors. 3. Sovereign Green Bonds are non-interest-bearing zero-coupon instruments issued exclusively for short-term liquidity management. Which of the statements given above are correct?
- [A] 1 and 3 only
- [B] 1 and 2 only
- [C] 2 and 3 only
- [D] 1, 2 and 3
▶ Reveal Official Answer & Analytical Explanation
Statements 1 and 2 are correct: Sovereign Green Bonds are long-dated securities designed for long-gestation green projects, and 'nil devolvement' signifies that market demand fully absorbed the auctioned amount without requiring Primary Dealers to take up unsubscribed debt. Statement 3 is incorrect because SGrBs are long-term dated securities carrying an explicit coupon yield (e.g., 7.50%).
🏛️ Historical Twin PYQ Anchor (2021)
Consider the following statements regarding the "National Clean Air Programme (NCAP)": 1. It is implemented by the Ministry of Environment, Forest and Climate Change. 2. Central Pollution Control Board acts as the sole regulatory executive body.