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The government, on Thursday, announced the conversion/ switch of five government securities (G-Secs), maturing in 2021 and 2022, for an aggregate amount of ₹30,000 crore (face value), into five securities maturing between 2031 and 2060 through an auction on July 20.
This coversion/ switch will help the government postpone the redemption pressure at a time when it is set to borrow ₹4.20-lakh crore more in FY21 as the pandemic-related expenses for the health and social sectors mount.
According to a Reserve Bank of India (RBI) statement, the 7.80 per cent (coupon rate) G-Sec maturing in 2021 aggregating ₹4,000 crore will be converted/ switched into a floating rate bond (FRB) maturing in 2033.
The 7.94 per cent G-Sec maturing in 2021 aggregating ₹3,000 crore will be converted/ switched into 6.68 per cent G-Sec maturing in 2031.
The 6.17 per cent G-Sec maturing in 2021 aggregating ₹3,000 crore will be converted/ switched into 6.57 per cent G-Sec maturing in 2033.
The 8.35 per cent G-Sec maturing in 2022 aggregating ₹15,000 crore will be converted/ switched into 7.19 per cent G-Sec maturing in 2060.
The 8.15 per cent G-Sec maturing in 2022 aggregating ₹5,000 crore will be converted/ switched into 7.16 per cent G-Sec maturing in 2050.
RBI started conducting auction for conversion of Government of India securities on the third Monday of every month from April 22, 2019
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