New Delhi: The Reserve Bank of India, recently in talks with the country’s largest bank, State Bank of India, has requested the PSU lender to make bulk purchases. bond Multiple sources told ETMarkets.com that the conversion will be introduced on October 18th.

On October 18, the government is going to switch to two short-term bonds – 5.09 per cent, 2022 paper and 8.08 per cent, 2022 paper (matured in April 13, 2022 and August 2, 2022) with three long-term floating bonds. Rate Bonds – FRB 2028 Bonds, FRB 2031 Bonds and FRB 2034 Bonds.

The total quantum of the switch, or conversion operation, is set at Rs 36,000 crore.

In a ‘conversion’ or switch operation, the government usually issues long-term bonds in exchange for short-term papers to facilitate future redemption obligations.

In the next financial year, the government’s loan repayment is set at Rs 4.2 lakh crore. If the government and reserve Bank of India If the figures do not manage to bring down this figure significantly, the gross borrowings – the sum of the government’s net cash requirement and redemptions – are likely to cross an earlier record high of around Rs 13 lakh crore.

“RBI had a backdoor meeting with SBI; Out of 36,000 crore floaters (FRBs) put up for auction, State Bank Of India 20,000 crore at least; That was the gist of the conversation,” a Treasury chief with knowledge of the matter said on condition of anonymity.