RBI Share In Government Securities Is Rising: Should Bond Investors Rethink Yield Outlook?

SBI data shows a quiet shift in market control, changing how bond traders plan their year. RBI’s growing presence in the sovereign debt market may leave yields in a tight range.

Sometimes a quiet statistic changes the mood across the debt market. That’s what the SBI report released in June 2025 did, it pointed out that RBI share in government securities is rising, from 11.9% in June 2024 to 14.2% in June 2025. And that seemingly small rise pushed many traders to adjust their expectations for yield movement.

A central bank holding more of the government’s debt sounds like routine work. But the impact? Less supply in the secondary market, calmer bond movements, and a stronger case for a rangebound outlook.

This also arrives at a time when India’s internal debt is growing steadily, but maturity pressure is quietly building beneath the surface.

Bond Prices Not Rising Fast? This May Be The Hidden Reason Behind It

The shift is not very dramatic. Still, it changes how demand looks. A higher RBI share affects supply in daily trading, and that shapes the impact of RBI holdings on bond market yields. The SBI report linked this rise to a calm stretch in yields through 2025.

There is another part to this. The Department of Economic Affairs shared that 27 percent of internal debt is due for maturity within five years. That adds a bit of pressure on rollover work. Not too sharp, but steady. That’s how we see it anyway.
 

This clear trend shows why the RBI share in government securities is rising and how it shapes supply in the market.

Why Traders Expect G-Sec Yields To Stay Rangebound Despite Big Borrowing?

Government securities are debt papers issued by the Centre, a basic definition, but helpful. Here’s a simple guide to G-Secs by LoansJagat. When the RBI holds a bigger part of this pool, there is less floating paper in the market. Traders call it a free float. And when free float dips, sharp jumps in yields get softer. The rangebound outlook for government bond yields mentioned in the report seems tied to this.

The RBI also sets the tone of interest rates. So the monetary policy influence on sovereign debt markets shows up through these shifts. Feels strange sometimes, but small movements inside the RBI balance sheet ripple through the system.

Here is the broad level of internal debt:
 

So while total debt is growing, RBI share in government securities is rising, providing a cushion in market absorption.

Conclusion 

Bond traders now expect minimal yield swings, even with steady government borrowing. This stability is tied directly to the central bank’s rising presence in the bond market.

Earlier stories around auctions and flat yields now make more sense. The SBI report just connects the dots: RBI share in government securities rising is anchoring this trend.

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