Cut-off Rate for Underwriting Commission: Implications on the Market

On September 25, 2026, the Reserve Bank of India (RBI) announced a minimum cut-off rate for underwriting commissions in the government securities auction. This move has significant implications for investors and financial institutions operating in the Indian market. The set rate is 0.54 paise per ₹100 applicable to the 2036 maturity bonds. This reduction in commission rates reflects global economic dynamics and foreign exchange pressures that have influenced recent market trends. The measure aims to attract more participation from investors in government bond markets, potentially enhancing liquidity and volatility in secondary markets. Additionally, the announcement aligns with RBI's balanced approach to monetary policy, supporting an economy amid global uncertainties.