The Reserve Bank of India has failed to sell the bonds to bidders at an auction for the fourth week in a row, raising concerns that government may have to pay investors much more to complete this fiscal's borrowing programme.

RBI was scheduled to sell Rs 120 billion of four different securities, but it could sell only Rs 810 million of the 6.84% 2020 Bond are sold to bidders out of the Rs 30 billion on offer.

The remaining Rs 29.2 billion had to be purchased by the underwriters of the auction.

The constant lack of demand is definitely a cause for worry for the government, which is slated to borrow a total of Rs 6.05 trillion rupees in the current fiscal years which started in April 2018.

RBI is scheduled to buy Rs 100 billion of bonds via an open market operation on May 17.

Post-auction, the 10-year benchmark bond's yield eased by one basis point to reach 7.73 percent as the long-end papers were fully sold. The bond had closed at 7.72 percent on Thursday.

Bonds in India has witnessed a heavy-sell off so far this year as the rate of inflation is above the RBI's 4 percent medium term-target.

Chances are there that RBI may raise the interest rates before the year-end, in the backdrop of the rising oil prices during recent weeks added with the weakening rupee against dollar.