Executive Summary:
The Reserve Bank of India (RBI) announces the auction of Government of India dated securities for a notified amount of Rs 15,000 crore. The auction, conducted by the RBI in Mumbai, is price-based using a multiple price method. Both competitive and non-competitive bids must be submitted electronically via the RBI's e-Kuber system by November 11, 2016, with payment by successful bidders due on November 15, 2016.
Key Points / Main Content:
* **Auction Details:**
* Four Government of India dated securities will be auctioned.
* The total notified amount for the auction is Rs 15,000 crore.
* The auction is price-based using a multiple price method.
* The RBI at Mumbai will conduct the auctions.
* **Bidding Process:**
* Minimum bid amount is Rs. 10,000 nominal and in multiples thereof.
* Up to 5% of the notified amount will be allotted to eligible individuals/institutions under the Non-competitive Bidding Facility.
* Competitive and non-competitive bids must be submitted electronically via the RBI e-Kuber system.
* Physical bids are not accepted, except in extraordinary circumstances.
* Non-competitive bids: 10.30 a.m. and 11.30 a.m.
* Competitive bids: 10.30 a.m. and 12.00 noon on November 11, 2016.
* The aggregate amount of bids submitted by a person in an auction should not exceed the notified amount of auction.
* **Auction Outcome and Settlement:**
* RBI will determine the minimum price for accepted bids.
* RBI has the discretion to accept or reject bids.
* Auction results will be announced on November 11, 2016.
* Payment by successful bidders is due on November 15, 2016.
* Government Stocks will be issued via Subsidiary General Ledger (SGL) account or Stock Certificate.
* Interest will be paid half-yearly.
* **Security Details:**
* Securities include: 6.84 GS 2022, 6.97 GS 2026, 7.73 GS 2034 and 7.72 GS 2055
* Repayment dates: December 19, 2022; September 06, 2026; December 19, 2034; and October 26, 2055, respectively.
* Stocks qualify for ready forward facility.
* Stocks are eligible for When Issued trading between November 08 - November 11, 2016.
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. The auction provides an opportunity to invest in government securities and manage their investment portfolios.
* Action Required: Submit competitive and/or non-competitive bids electronically via the RBI e-Kuber system by the specified deadlines. Ensure payment by November 15, 2016, if bids are successful.
* **Eligible Individuals and Institutions:**
* Impact: Eligible individuals and institutions can participate in the auction through the Non-Competitive Bidding Facility.
* Action Required: Submit firm orders to their bank or PD, who will then submit a single consolidated non-competitive bid on their behalf.
* **Investors:**
* Impact: Investors can submit more than one competitive bid at different prices.
* Action Required: Submit bids electronically via the RBI e-Kuber system, ensuring the aggregate amount of bids does not exceed the notified amount.
Key Entities Referenced
Reserve Bank of India: Central bank of India, responsible for conducting the auctions of Government of India dated securities and determining the minimum price for accepted tenders.
Government of India: Issuer of dated securities being auctioned, offering to sell/reissue securities for a notified amount.
All Scheduled Commercial Banks: Entities eligible to participate in the auction of Government of India dated securities.
All State Cooperative Banks: Entities eligible to participate in the auction of Government of India dated securities.
All Scheduled Primary Urban Cooperative Banks: Entities eligible to participate in the auction of Government of India dated securities.
All Financial Institutions: Entities eligible to participate in the auction of Government of India dated securities.
All Primary Dealers: Entities eligible to participate in the auction of Government of India dated securities.
6.84 GS 2022: Government of India security maturing in 2022 with a coupon rate of 6.84%.
RBI/2016-17/109
Ref. No. IDMD/1029/08.02.032/2016-17 November 07, 2016
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 (issue/re-issue) four dated securities for notified
amount of Rs 15,000 crore as per the following details:
Sr Security Notified GoI Notification Auction Settlement
No Amount Date date
(in Rs crore)
1 6.84% GS 2022 3,000 4(2)-W&M/2016 dated
November 07, 2016
2 6.97% GS 2026 7,000 4(2)-W&M/2016(i) dated
November 07, 2016.
November November
11, 2016 15, 2016
3 7.73% GS 2034 2,000 4(2)-W&M/2016(ii) dated
(Friday) (Tuesday)
November 07, 2016
4 7.72% GS 2055 3,000 4(2)-W&M/2016(iii) dated
November 07, 2016
Total 15,000
The auction for securities will be price based using multiple price method. The Reserve Bank
of India at Mumbai will conduct the auctions. The salient features of the auctions and the terms
and conditions governing the issue of the Stocks are given in the notifications (copies enclosed),
which should be read along with the General Notification F. No. 4 (13)–W&M/2008, dated
October 8, 2008 issued by Government of India.
2. We wish to draw your attention, in particular, to the following:
(i) The Stocks will be issued for a minimum amount of Rs.10,000/- (nominal) and in multiples
of Rs 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
November 11, 2016. 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 11.30
a.m. and the competitive bids should be submitted between 10.30 a.m. and 12.00 noon.
(iv) An investor can submit more than one competitive bid at different prices 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.
(v) 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.
(vi) The result of the auctions will be announced on November 11, 2016 and payment by
successful bidders will be on November 15, 2016 (Tuesday).
(vii) 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.
(viii) The Government Stocks will be repaid at par on December 19, 2022; September 06,
2026; December 19, 2034, and October 26, 2055 respectively.
(ix) The Stocks will qualify for the ready forward facility.
(x) The Stocks will be eligible for “When Issued” trading during the period November 08-
November 11, 2016. in accordance with guidelines on ‘When Issued’ transactions in Central
Government Securities issued by Reserve Bank of India vide circular No.RBI/2006-07/178
dated November 16, 2006 as amended from time to time.
Yours faithfully
(Chandan Kumar)
General Manager