More Stories

Informist, Wednesday, Jun. 25, 2025

 

NEW DELHI – Commercial banks' holdings of central government dated securities fell to a nine-quarter low of 36.18% of the total outstanding amount of INR 105.39 trillion at the end of March, according to data released by the Reserve Bank of India Wednesday in its monthly bulletin. The reduction came at a time when the central bank bought INR 2.45 trillion worth of gilts in Jan-Mar through both open market operation auctions and in the secondary market. 

 

Consequently, the RBI's share of gilt holdings zoomed to 12.78% of the total outstanding as of March-end from 10.55% in December, its highest share since September 2023. Insurance companies and mutual funds shed their share of the government bond market slightly in the March quarter, though insurers remained the second-largest gilt holding at 25.81% of the outstanding.

 

Meanwhile, foreign portfolio investors' holdings of gilts stood at a record 3.12% of the outstanding at the end of March, up from 2.81% at December end, after the conclusion of India's inclusion on J.P. Morgan's flagship index for emerging market local currency debt. India has a maximum weight of 10% on the Government Bond Index – Emerging Markets, and was also included in similar indices by Bloomberg and FTSE Russell last year. Clearing Corp. of India data shows FPI holdings of fully accessible route bonds had swelled to INR 3.06 trillion at the end of March, but these have come down to INR 2.75 trillion as of Wednesday.

 

FPI investments in state government securities and Treasury bills were both less than 0.1% of the outstanding at March-end. Insurance firms' share in state bond holdings fell by more than a percentage point between December and March to 24.07%. Commercial banks expanded their lion's share in state bonds, holding 35.40% of the outstanding, while provident and pension funds both increased their share and held nearly 30% of the outstanding state bonds at March-end.

 

As for their own investments, states share of T-bill holdings nearly halved between December and March to 11.23%. The share of T-bills in Jan-Mar was picked up by commercial banks, mutual funds and financial institutions. This is a seasonal slump for state governments as they ramp up their capital spending at the year-end and divest away from short-term investment avenues, though their share in the holdings nearly doubled on year.  End

 

Reported by Aaryan Khanna

Edited by Akul Nishant Akhoury

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2025. All rights reserved.