Executive Summary:
This document announces the auction of three Government of India dated securities for a notified amount of ₹19,000 crore. The auction, conducted by the Reserve Bank of India (RBI), will be price-based using a multiple price method. Competitive and non-competitive bids must be submitted electronically via the RBI’s e-Kuber system on April 30, 2020, with settlement on May 4, 2020.
Key Points / Main Content:
Auction Details:
* Three Government of India dated securities will be reissued.
* The total notified amount for the auction is ₹19,000 crore.
* GoI has the option to retain additional subscription up to ₹2,000 crore against any one or more securities.
* The auction will be price-based using a multiple price method.
Bidding Process:
* Minimum bid amount is ₹10,000 nominal and in multiples thereof.
* Up to 5% of the notified amount is reserved for eligible individuals/institutions under the Non-Competitive Bidding Facility.
* Banks/PDs must submit a single consolidated non-competitive bid on behalf of their constituents via e-Kuber.
* Both competitive and non-competitive bids must be submitted electronically on the RBI’s e-Kuber system on April 30, 2020.
* Non-competitive bids: 10.30 a.m. and 11.00 a.m.
* Competitive bids: 10.30 a.m. and 11.30 a.m.
* Physical bids are only accepted in the event of system failure.
* An investor can submit multiple competitive bids, but the total amount cannot exceed the notified auction amount.
* RBI has the discretion to accept or reject any or all bids.
Settlement and Issuance:
* Auction results will be announced on April 30, 2020.
* Payment by successful bidders is due on May 4, 2020.
* Government Stocks will be issued via Subsidiary General Ledger Account (SGL) or in the form of Stock Certificates.
* Interest will be paid half-yearly.
* The stocks mature on November 04, 2024, June 17, 2033, and September 20, 2050, respectively.
* The stocks qualify for the ready forward facility and are eligible for When Issued trading between April 27-30, 2020.
Impact Analysis:
Scheduled Commercial Banks, State Cooperative Banks, Scheduled Primary Urban Cooperative Banks, Financial Institutions, and Primary Dealers:
Impact: These entities can participate in the auction of Government of India dated securities. They must adhere to the specified bidding process and timelines, including the use of the RBI’s e-Kuber system for electronic submissions. They are also responsible for submitting consolidated non-competitive bids on behalf of their constituents.
Action Required: Prepare and submit competitive and/or non-competitive bids through the e-Kuber system within the specified timeframes on April 30, 2020. Ensure compliance with all terms and conditions outlined in the notification.
Eligible Individuals and Institutions (under Non-Competitive Bidding Facility):
Impact: These entities have the opportunity to participate in the auction through the non-competitive bidding process, with up to 5% of the notified amount reserved for them.
Action Required: Submit firm orders to their bank or Primary Dealer (PD) to participate in the non-competitive bidding process.
Successful Bidders:
Impact: Successful bidders will be allotted Government Stocks and are required to make payment on the settlement date.
Action Required: Ensure funds are available for payment on May 4, 2020, and receive the Government Stocks in their SGL account or in the form of Stock Certificates.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for regulating the banking system and managing the country's currency.
All Scheduled Commercial Banks: A category of banks in India that are regulated by the Reserve Bank of India and meet certain criteria.
All State Cooperative Banks: Cooperative banks operating at the state level in India, regulated by the Reserve Bank of India and state governments.
All Scheduled Primary Urban Cooperative Banks: Urban cooperative banks in India that are included in the Second Schedule to the Reserve Bank of India Act, 1934.
All Financial Institutions: Entities that provide financial services, such as lending, investment, and insurance.
All Primary Dealers: Entities authorized by the Reserve Bank of India to underwrite and deal in government securities.
Government of India Dated Securities: Debt instruments issued by the Government of India with a fixed maturity date.
Mumbai, Maharashtra: The location of the Reserve Bank of India Office where the stocks will be sold.
RBI/2019-20/227
Ref.No.IDMD/08.02.032/2019-20 April 24, 2020
All Scheduled Commercial Banks
All State Co-operative Banks/All Scheduled Primary
(Urban) Co-operative Banks /All Financial Institutions/
All Primary Dealers.
Dear Sir/Madam,
Auction of Government of India Dated Securities
Government of India has offered to sell (re-issue) three dated securities for a notified amount of ₹
19,000 crore as per the following details:
Notified
Sr Settlement
Security Amount GoI Notification Auction Date
No date
(in ₹ crore)
1 6.18% GS 2024 9,000
F.No.4(5)
April 30, 2020 May 04, 2020
2 7.57% GS 2033 4,000 W&M/2020 dated
(Thursday) (Monday)
April 24, 2020
3 7.16% GS 2050 6,000
Total 19,000
GoI will have the option to retain additional subscription up to ₹ 2,000 crore each against any one
or more of the above securities. The sale will be subject to the terms and conditions spelt out in
this notification (called ‘Specific Notification’). The stocks will be sold through Reserve Bank of
India Mumbai Office, Fort, Mumbai - 400001, as per the terms and conditions specified in the
General Notification F.No.4(2)–W&M/2018, dated March 27, 2018 and Reserve Bank of India
press release dated March 31, 2020 for release of Indicative market borrowing calendar for H1
2020-21.
The auction will be price based (for all securities), using multiple price method.
2. We wish to draw your attention, in particular, to the following:
(i) The Stocks will be issued for a minimum amount of ₹ 10,000/- (nominal) and in multiples of ₹
10,000/- thereafter.
(ii) In all the auctions, Government Stock up to 5% of the notified amount of sale will be allotted to
the eligible individuals and institutions under the Scheme for Non-competitive Bidding Facility in the
Auctions of Government Securities. Each bank or PD on the basis of firm orders received from
their constituents will submit a single consolidated non-competitive bid on behalf of all its
constituents in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber)
system. Allotment under the non-competitive segment to the bank or PD will be at the weighted
average rate of yield/price that will emerge in the auction on the basis of the competitive bidding.(iii) Both competitive and non-competitive bids for the auction should be submitted in electronic
format on the Reserve Bank of India Core Banking Solution (E-Kuber) system on April 30, 2020.
Bids in physical form will not be accepted except in extraordinary circumstances. The non-
competitive bids should be submitted between 10.30 a.m. and 11.00 a.m. and the competitive bids
should be submitted between 10.30 a.m. and 11.30 a.m.
(iv) Only in the event of system failure, physical bids would be accepted. Such physical bids should
be submitted to the Public Debt Office (email; Phone no: 022-22632527, 022-22701299) in the
prescribed form obtainable from RBI website (https://www.rbi.org.in/Scripts/BS_ViewForms.aspx)
before the auction timing ends. In case of technical difficulties, Core Banking Operations Team
should be contacted (email; Phone no: 022-27595414, 022-27595666). For other auction related
difficulties, IDMD auction team can be contacted (email; Phone no: 022-27595688).
(v) An investor can submit more than one competitive bids in electronic format on the Reserve
Bank of India Core Banking Solution (E-Kuber) system. However, the aggregate amount of bids
submitted by a person in an auction should not exceed the notified amount of auction.
(vi) On the basis of bids received, the Reserve Bank will determine the minimum price up to which
tenders for purchase of Government Stock will be accepted at the auctions. Bids quoted at rates
lower than the minimum price determined by the Reserve Bank of India will be rejected. Reserve
Bank of India will have the full discretion to accept or reject any or all bids either wholly or partially
without assigning any reason.
(vii) The result of the auctions will be announced on April 30, 2020 (Thursday) and payment by
successful bidders will be on May 04, 2020 (Monday).
(viii) The Government Stocks will be issued by credit to Subsidiary General Ledger Account (SGL)
of parties maintaining such account with Reserve Bank of India or in the form of Stock Certificate.
Interest on the Government Stock will be paid half-yearly.
(ix) The Government Stocks will be repaid at par on Nov 04, 2024, Jun 17, 2033, and Sep 20,
2050 respectively.
(x) The Stocks will qualify for the ready forward facility.
(xi) The Stocks will be eligible for “When Issued” trading during the period April 27 April 30,
2020 in accordance with guidelines on ‘When Issued’ transactions in Central Government
Securities issued by Reserve Bank of India vide circular No. RBI/2018-19/25 dated Jul–y 24, 2018
as amended from time to time.
Yours faithfully
(Arvind Kumar)
General Manager