UPSC Prelims Practice Questions — On Mar. 2, RBI to conduct ₹25,000 cr switch auction

Q1. Among the government securities bought back (source securities) in the February 2026 switch operation with the RBI, which one had the LARGEST face value?

  • A. 8.33% GS 2026
  • B. 8.15% GS 2026
  • C. 8.24% GS 2027
  • D. 7.27% GS 2026

Q2. In the context of the RBI's February–March 2026 switch auctions, the term 'FY27 redemption wall' most precisely refers to which one of the following?

  • A. The roughly ₹5.47 lakh crore of government securities scheduled to mature during 2026-27
  • B. The statutory ceiling on gross market borrowing permitted in 2026-27 under the FRBM framework
  • C. The total interest (coupon) outgo on the Centre's public debt falling due in 2026-27
  • D. The volume of securities the RBI is committed to purchase under OMO during 2026-27

Q3. The Reserve Bank of India's obligation to manage the public debt of the Union Government primarily flows from which one of the following?

  • A. Section 20 of the Reserve Bank of India Act, 1934
  • B. Section 3 of the Fiscal Responsibility and Budget Management Act, 2003
  • C. Article 292 of the Constitution of India
  • D. Section 24 of the Banking Regulation Act, 1949

Q4. Consider the following statements about the RBI's/Government's debt and liquidity management operations. Which of the statements given above is/are NOT correct?

  1. Open Market Operations (OMO) involve the outright purchase or sale of government securities by the RBI.
  2. A buyback auction involves the government repurchasing its outstanding securities, thereby extinguishing that debt.
  3. A switch auction elongates the maturity profile of government debt by swapping short-tenor bonds for longer-tenor ones.
  4. The G-SAP (2021-22) was a programme of open-market sale of government securities aimed at draining surplus liquidity from the system.
  • A. 1 and 2
  • B. 3 only
  • C. 4 only
  • D. 2 and 4

Q5. The Government Securities Acquisition Programme (G-SAP), under which the RBI made an upfront commitment to open-market purchases of government securities, was introduced in which year?

  • A. 2021
  • B. 2016
  • C. 2008
  • D. 2020

Q6. With reference to the mechanics and effects of the 2026 government securities switch auctions, which of the statements given above is/are correct?

  1. Switch auctions raise the weighted average maturity of the government's outstanding debt.
  2. In the March 2026 switch series, FY27-maturing securities were replaced with securities maturing after FY32.
  3. In the February 2026 switch operation, the government issued the 8.30% GS 2040 as the destination (longer-dated) security.
  4. A switch auction immediately reduces the total outstanding stock of government debt.
  • A. 1 and 2 only
  • B. 2, 3 and 4
  • C. 1, 2 and 3
  • D. 1 and 4 only

Q7. In the February–March 2026 liability-management exercise, how many switch auctions did the RBI conduct, with the ₹25,000 crore auction of March 2, 2026 being the latest?

  • A. Two
  • B. Three
  • C. Four
  • D. Five

Q8. In the primary market for Central Government dated securities, the mandatory underwriting of a specified portion of each auction is undertaken by which of the following?

  • A. Primary Dealers, under a Minimum Underwriting Commitment
  • B. Scheduled commercial banks, in proportion to their SLR holdings
  • C. The Securities and Exchange Board of India (SEBI)
  • D. The Clearing Corporation of India Ltd (CCIL)

Q9. The half-yearly market borrowing calendar of the Union Government, indicating the schedule of dated-securities auctions, is finalised and issued by which of the following?

  • A. The Reserve Bank of India, in consultation with the Government of India
  • B. The Securities and Exchange Board of India
  • C. NITI Aayog
  • D. The Comptroller and Auditor General of India