A new 5-year bond is born at 10:30 this morning

Change: The government sells Rs 32,000 crore of bonds this morning, Friday 4 September, and one is brand new: a 5-year bond maturing 7 September 2031, Rs 21,000 crore of it. The rest is Rs 11,000 crore of 7.71% GS 2066.

Impact: A new 5-year government bond gives the market a fresh benchmark: its cut-off yield today becomes a reference for pricing bonds and fixed-rate loans of similar length.

Action: Bids on E-Kuber 10:30 to 11:30 this morning. Result today. Money moves Monday 7 September.

Change: Yesterday we said desks holding the four buyback bonds must decide by 10:30. The result: of the Rs 30,000 crore offered, holders brought only Rs 3,109 crore, and the government accepted none of it. Zero.

Impact: Banks would rather keep short bonds than sell early. With this much spare cash, nobody needs the money.

Action: If your desk held back, the market agreed with you. The bonds mature on their own by February 2027.

Change: Banking system spare cash touched Rs 9.7 lakh crore this week, the highest ever recorded. August's daily average surplus was Rs 3.67 lakh crore, up from Rs 1.07 lakh crore in July, after the 136 billion dollar deposit flood we reported yesterday.

Impact: Economists quoted by Business Today expect the Reserve Bank to keep taking cash in and possibly sell bonds outright. The rupee closed at 94.48 on Thursday 3 September, against 96.96 at its weakest in May.

Action: Watch deposit rates. Cash this plentiful pushes short-term rates down first.

Change: Reserve Bank of India Deputy Governor S C Murmu told the CII NBFC Summit on Thursday 3 September that lenders should use artificial intelligence and machine learning tools to catch early signs of borrower stress.

Impact: His numbers: NBFC credit is 16.7 per cent of GDP, up from 15.9 a year ago, about 27 per cent of bank credit. His warning: growth must never come at the cost of underwriting standards.

Action: Credit teams: expect your bank to invest in early-warning systems, stress testing and provisioning models.

Change: Banks are closed today for Janmashtami in about 20 states, including Uttar Pradesh, Gujarat, Rajasthan, Tamil Nadu and Telangana. Maharashtra, Karnataka, Kerala, West Bengal and Assam work as usual.

Impact: Mumbai is open, so the bond sale and money markets run normally. Online banking and ATMs work everywhere.

Action: The daily cash line: banks parked Rs 5,18,742 crore of the Rs 6,00,000 crore asked overnight on Thursday 3 September, at 5.24 per cent. Today's ask is Rs 7,00,000 crore for three days, bidding 9:30 to 10:00.

What changed: Two dated securities on sale today for a notified Rs 32,000 crore: New GS 2031 maturing 7 September 2031 for Rs 21,000 crore, and 7.71% GS 2066 for Rs 11,000 crore. Multiple price method, with an option to retain Rs 2,000 crore extra against each.

Who is affected: Treasury and investment desks, primary dealers, and any bank planning where its spare cash goes.

What to do: Competitive bids on E-Kuber 10:30 to 11:30; non-competitive 10:30 to 11:00. Result today, settlement Monday 7 September. The new bond traded when-issued from 1 September, so screens already show where it may clear.

Last date: Today, Friday 4 September 2026, 10:30 to 11:30 in the morning.

Source: Reserve Bank of India press release, 31 August 2026 ↗

What changed: The buyback answer was no. Against Rs 30,000 crore notified, participants offered only Rs 3,109.305 crore across the four bonds. Amount accepted: NIL, on every one.

Who is affected: Every desk that weighed selling yesterday, and anyone reading what the flop says about bank cash positions.

What to do: Nothing to file. The lesson is the number: holders kept their bonds.

Source: Reserve Bank of India press release, 3 September 2026 ↗

What changed: The Reserve Bank takes in up to Rs 7,00,000 crore of bank cash for three days this morning, its largest single ask of this cycle. Money returns Monday 7 September.

Who is affected: Treasury desks deciding between this three-day window, today's bond auction and the overnight market.

What to do: Bidding 9:30 to 10:00 on E-Kuber. Note the morning's choice: park for three days here, or bid for the new bond an hour later.

Last date: Today, Friday 4 September 2026, 9:30 to 10:00 in the morning.

Source: Reserve Bank of India press release, 3 September 2026 ↗

What changed: Deputy Governor S C Murmu asked NBFCs and housing finance companies to use AI and machine learning to detect early borrower stress, with rigorous stress testing, early warning systems and dynamic provisioning.

Who is affected: NBFC and bank credit teams and risk departments.

What to do: Read the direction: asset quality tooling is where supervisory attention is going.

Source: ANI report on the 7th CII NBFC and HFC Summit, 3 September 2026 ↗

Treasury: Three windows this morning: three-day parking at 9:30, the new 2031 bond at 10:30. Auction money settles Monday 7 September.

Investment desk: Today's New GS 2031 cut-off becomes the fresh 5-year benchmark. Where it clears against the 91-day treasury bill at 5.26 per cent tells you how steep the short end has become.

Branch: Holiday today in about 20 states; Maharashtra, Karnataka, Kerala, West Bengal and Assam work. Next disruption on the calendar: the one-day strike called for Friday 11 September. Clear time-bound work by Thursday 10 September.

Credit: The Deputy Governor named the toolkit he expects: early-warning systems, stress testing, dynamic provisioning, AI on borrower data.

A customer read that banks are drowning in cash and asks: why is my home loan EMI not falling?

It is Friday 4 September, home loan day, and the record cash pile is in the newspapers. Branch staff will hear this question.

1. Agree with the fact. Yes, banks have never held this much spare cash: Rs 9.7 lakh crore. The number is real.
2. Explain what sets a home loan rate. Most floating home loans ride the policy repo rate, 5.25 per cent today on the Reserve Bank's own front page. Spare cash does not change the repo rate; only the rate committee does.
3. Explain what spare cash does move: deposit and short-term rates. The 91-day treasury bill cleared at 5.26 per cent this week. Deposit rates soften before loan rates do.
4. Check the customer's loan: repo-linked or not, the spread over repo, and the next reset date. A cut reaches the EMI only on the reset date.
5. Give the honest line: your rate moves when the Reserve Bank's rate moves. Watch the next rate decision, not the cash headlines.

Source: Business Today report on the record liquidity surplus, 3 September 2026 ↗

Check today: A long festival weekend is a fraud window. A caller saying your account will be frozen over the weekend unless you act now is using the holiday against you. The line that never changes: no bank and no regulator ever asks anyone to move money to a safe account.

Career path: the regulator just published your credit-career map

Read Deputy Governor Murmu's speech of Thursday 3 September as a hiring forecast. He named the toolkit lenders must build: early-warning systems, stress testing, dynamic provisioning, and AI on borrower data. NBFC credit is 16.7 per cent of GDP and growing faster than bank credit, so these teams are expanding. If you are choosing a lane this appraisal season, credit risk with data skills is the one the regulator itself is pointing at.

Source: ANI report on the 7th CII NBFC and HFC Summit, 3 September 2026 ↗

Rs 3,109 crore

All the sellers the Rs 30,000 crore buyback could find. The government wanted ten times more than holders offered, and in the end it accepted nothing at all.

Source: Reserve Bank of India press release, 3 September 2026 ↗

4 September — New GS 2031 and 7.71% GS 2066 auction today: bids 10:30 to 11:30 on E-Kuber, result the same day.

7 September — Auction money settles, and the Rs 7,00,000 crore three-day parking returns to banks.

11 September — One-day nationwide bank strike called by the unions, Friday 11 September.

30 October — First half-yearly calamity-relief return due on the CIMS portal.

31 December — The Reserve Bank's swap window closes for external commercial borrowings and overseas foreign currency borrowings.

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