Govt conducts switch with RBI, moves FY27 maturities to 2040 bond

Centre buys back over Rs 75,500 crore of FY27 securities from RBI and issues 8.30% GS 2040 bond to smoothen redemption profile

The Government of India on Thursday conducted a conversion/switch operation with the Reserve Bank of India (RBI) to smoothen its liability profile, the RBI said in a release.

 

Under the operation, the government bought back securities maturing in the financial year 2026–27 from the RBI and issued a longer-dated security of equivalent market value, based on Financial Benchmarks India Pvt Ltd (FBIL) prices as on February 11, 2026.

 

The settlement of the operation is scheduled on February 13.

 

As part of the transaction, the government bought back four securities — 7.27 per cent GS 2026, 8.33 per cent GS 2026, 8.15 per cent GS 2026, and 8.24 per cent GS 2027 — aggregating over Rs 75,500 crore in face value.

 

 

In exchange, the government issued the 8.30 per cent GS 2040 bond to the RBI at a price of Rs 110.45, with a total face value of Rs 69,436.152 crore.

 

The largest component of the buyback was the 8.33 per cent GS 2026, with a face value of Rs 34,957.713 crore, followed by Rs 19,958.783 crore of the 8.15 per cent GS 2026, Rs 17,060.240 crore of the 8.24 per cent GS 2027, and Rs 3,527.689 crore of the 7.27 per cent GS 2026.

 

Switch operations are typically used by the government to manage redemption pressures in specific financial years by replacing near-term maturities with longer-tenor securities. Such operations help smoothen the redemption profile, reduce rollover risks, and support better cash and debt management.

 

The move comes amid a heavy maturity pipeline in FY27 and is aimed at spreading out repayment obligations over a longer horizon while maintaining market stability.