The Reserve Bank of India rejected every bid at the government's Treasury bill auction on Wednesday, October 21, refusing to borrow Rs 23,000 crore — yaani Rs 230 billion — at the higher yields investors were demanding, Business Standard and Informist reported.

Source: Business Standard

The auction covered 91-day, 182-day and 364-day Treasury bills. It was the first time the RBI had rejected bids across all three maturities since March 2025, Informist reported, noting that bids for the 182-day and 364-day papers were last rejected on June 3.

Source: Informist Media

In all, 224 bids were received — 77 for the 91-day bills, 68 for the 182-day bills and 79 for the 364-day bills — and none was accepted, The Times of India reported via 7Globe.

Source: The Times of India via 7Globe

Bond dealers cited by the reports attributed the standoff to tight liquidity in the banking system, linked to GST-related outflows, a high government cash balance of about Rs 5.3 lakh crore — yaani Rs 530,000 crore — and funds blocked in the Jio Platforms IPO subscription. Dealers said the RBI was reluctant to accept higher rates because that could signal elevated short-term borrowing costs.

The rejection added pressure to the wider bond market. The benchmark 10-year government bond yield closed at 7.44 per cent, its highest level since November 2022, according to market reports summarised by Data Street and FinBrooks. Traders said rising crude oil prices and higher US Treasury yields were also weighing on sentiment.

The RBI has not, in the reports, presented the rejection as a funding problem: with the government holding a large cash balance, dealers said the central bank could afford to wait rather than lock in higher short-term rates. The next Treasury bill auctions and movements in bond yields will show whether the pressure persists.