Executive Summary:
The Reserve Bank of India (RBI) announces the auction of four Government of India dated securities for a total notified amount of ₹16,000 crore. The auction will be price-based using a multiple price method and conducted by the RBI in Mumbai. Both competitive and non-competitive bids must be submitted electronically via the RBI's e-Kuber system on December 27, 2019, with settlement on December 30, 2019.
Key Points / Main Content:
Auction Details:
* Four government securities are being reissued with a total notified amount of ₹16,000 crore.
* GoI has the option to retain additional subscription up to ₹1,000 crore against any one or more of the securities.
* The auction is price-based using the multiple price method.
* The RBI Mumbai will conduct the auctions.
* Auction date: December 27, 2019.
* Settlement date: December 30, 2019.
Bidding Process:
* Minimum bid amount is ₹10,000 nominal and in multiples thereof.
* Up to 5% of the notified amount will be allotted to eligible individuals and institutions under the Non-Competitive Bidding Facility.
* Banks/PDs must submit a single consolidated non-competitive bid on behalf of all constituents via e-Kuber.
* Both competitive and non-competitive bids must be submitted electronically via the RBI e-Kuber system on December 27, 2019.
* Non-competitive bids: 11:30 a.m. - 12:00 noon.
* Competitive bids: 11:30 a.m. - 12:30 p.m.
* Physical bids are accepted only in the event of system failure and should be submitted to the Public Debt Office before the auction timing ends.
* The aggregate amount of bids submitted by a person should not exceed the notified amount of auction.
* The RBI will determine the minimum price, and bids below this price will be rejected.
* The RBI has the discretion to accept or reject any bids.
Result and Settlement:
* Auction results will be announced on December 27, 2019.
* Payment by successful bidders is due on December 30, 2019.
* Government Stocks will be issued via SGL account or Stock Certificate.
* Interest will be paid half-yearly.
* Stocks will be repaid at par on their respective maturity dates (Nov 04, 2024; Dec 07, 2031; Jun 17, 2043; Jun 15, 2049).
Other Conditions:
* The stocks qualify for Repurchase (Repo) transactions.
* The stocks are eligible for When Issued trading between December 24 - December 27, 2019.
Impact Analysis:
Scheduled Commercial Banks
* Impact: Need to participate in the auction process if interested in acquiring the government securities.
* Action Required: Submit competitive and/or non-competitive bids through the RBI's e-Kuber system by the specified deadlines.
State Cooperative Banks
* Impact: Need to participate in the auction process if interested in acquiring the government securities.
* Action Required: Submit competitive and/or non-competitive bids through the RBI's e-Kuber system by the specified deadlines.
Scheduled Primary Urban Cooperative Banks
* Impact: Need to participate in the auction process if interested in acquiring the government securities.
* Action Required: Submit competitive and/or non-competitive bids through the RBI's e-Kuber system by the specified deadlines.
Financial Institutions
* Impact: Need to participate in the auction process if interested in acquiring the government securities.
* Action Required: Submit competitive and/or non-competitive bids through the RBI's e-Kuber system by the specified deadlines.
Primary Dealers
* Impact: Need to participate in the auction process if interested in acquiring the government securities. Also responsible for submitting consolidated non-competitive bids on behalf of their constituents.
* Action Required: Submit competitive and/or non-competitive bids through the RBI's e-Kuber system by the specified deadlines. Submit single consolidated non-competitive bids on behalf of their constituents.
Investors (Individuals and Institutions)
* Impact: Opportunity to invest in government securities through competitive or non-competitive bidding.
* Action Required: Submit bids through eligible banks or Primary Dealers, adhering to the specified amounts and deadlines.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for conducting the auctions.
Government of India: The issuer of the dated securities being auctioned.
Mumbai, Maharashtra: City in India where the Reserve Bank of India conducts the auctions.
All Scheduled Commercial Banks: A category of banks eligible to participate in the auction.
All State Cooperative Banks: A category of banks eligible to participate in the auction.
All Scheduled Primary Urban Cooperative Banks: A category of banks eligible to participate in the auction.
All Financial Institutions: A category of institutions eligible to participate in the auction.
All Primary Dealers: A category of financial institutions eligible to participate in the auction.
RBI/2019-20/120
Ref.No.IDMD/1767/08.02.032/2019-20 December 23, 2019
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) four dated securities for a notified amount of
₹16,000 crore as per the following details:
Notified
Sr
Security Amount GoI Notification Auction Date Settlement date
No
(in ₹ crore)
1 6.18% GS 2024 4,000
2 GOI FRB 2031 6,000 F.No.4(6) December 27, 2019 December 30, 2019
W&M/2019 dated
3 7.69% GS 2043 2,000 (Friday) (Monday)
December 23, 2019
4 7.72% GS 2049 4,000
Total 16,000
Subject to the limit of ₹16,000 Cr being total notified amount, GoI will have the option to retain
additional subscription up to ₹1000 Cr each against any one or more of the above securities.
The auction 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(2)–W&M/2018, dated March 27, 2018
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 ₹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 December 27,
2019. Bids in physical form will not be accepted except in extraordinary circumstances. The non-
competitive bids should be submitted between 11.30 a.m. and 12.00 noon and the competitive bids
should be submitted between 11.30 a.m. and 12.30 pm.
(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: 022-22702431, 022-
22705125).
(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 December 27, 2019 (Friday) and payment by
successful bidders will be on December 30, 2019 (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; Dec 07, 2031; Jun 17, 2043;
Jun 15, 2049 respectively.
(x) The Stocks will qualify for Repurchase transactions (Repo) in accordance with the Repurchase
transactions (Repo) Directions, 2018 as amended from time to time.
(xi) The Stocks will be eligible for “When Issued” trading during the period December 24 –
December 27, 2019 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
July 24, 2018 as amended from time to time.
Yours faithfully
(Arvind Kumar)
General Manager