On October 21, 2026, the RBI conducted a conversion auction involving multiple government securities, allowing holders to switch older securities into longer-duration papers, including up to 2060.
RBI Conducts Conversion Auction for G-Secs
The Reserve Bank of India conducted a conversion/switch auction of Government of India securities on October 19, 2026, enabling holders to exchange older dated securities for newer ones with longer maturities. The auction covered source securities maturing between 2027 and 2029—including 8.26% GS 2027 and 7.06% GS 2028—with notified amounts totaling ₹20,000 crore. Destination securities included 7.19% GS 2060, 7.41% GS 2036, and others extending to 2039.
Such switch auctions are part of the government’s liability management strategy, aimed at smoothing the maturity profile of outstanding debt and extending the average tenure. By incentivizing investors to swap shorter-dated high-coupon papers for longer-dated ones, the government can reduce refinancing risks in high-interest scenarios.
For legal advisors in debt restructuring or institutional investment, these auctions offer strategic opportunities. The tax and accounting treatment of such switches—especially regarding capital gains under the Income Tax Act and reporting under Ind-AS or IFRS—must be evaluated. Counsel should also assess documentation requirements for clients participating in the switch, particularly in fiduciary or fund management roles.
