Executive Summary:
The Reserve Bank of India (RBI) announces the auction of Government of India dated securities for a notified amount of ₹30,000 crore. The auction will be conducted through the RBI Mumbai Office, with both competitive and non-competitive bids to be submitted electronically on June 19, 2020. Settlement is scheduled for June 22, 2020.
Key Points / Main Content:
Auction Details:
* Four dated securities will be auctioned, including 5.09 GS 2022, 5.79 GS 2030, New GOI FRB 2033 and 7.19 GS 2060.
* The total notified amount is ₹30,000 crore, with the government retaining the option to accept an additional subscription of up to ₹2,000 crore against any one or more securities.
* The auction method will be yield-based for New GOI FRB 2033 and price-based for other securities, using a multiple price method.
Bidding Process:
* The minimum investment amount is ₹10,000 nominal and in multiples of ₹10,000 thereafter.
* Up to 5% of the notified amount will be allotted to eligible individuals and institutions under the Scheme for Non-competitive Bidding.
* Both competitive and non-competitive bids must be submitted electronically via the RBI's e-Kuber system on June 19, 2020.
* Non-competitive bids should be submitted between 10:30 a.m. and 11:00 a.m., and competitive bids between 10:30 a.m. and 11:30 a.m.
* Physical bids are only accepted in extraordinary circumstances, such as 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 in an auction should not exceed the notified amount of auction.
* RBI has the discretion to accept or reject any bids, wholly or partially, without assigning any reason.
Settlement and Other Details:
* Auction results will be announced on June 19, 2020, and payment by successful bidders is due on June 22, 2020.
* Government Stocks will be issued in Subsidiary General Ledger (SGL) accounts or as Stock Certificates.
* Interest on the Government Stock will be paid half-yearly.
* The Stocks will be repaid at par on April 13, 2022; May 11, 2030; Sep 22, 2033 and Sep 15, 2060 respectively.
* The stocks qualify for the ready forward facility and are eligible for When Issued trading between June 16 and June 19, 2020.
Impact Analysis:
Scheduled Commercial Banks:
* Impact: Banks can participate in the auction to manage their investment portfolios and meet SLR requirements.
* Action Required: Submit competitive and/or non-competitive bids through the e-Kuber system within the specified timeframe, based on their investment strategies and client orders.
State Cooperative Banks:
* Impact: Similar to commercial banks, cooperative banks can invest in government securities.
* Action Required: Participate in the auction by submitting bids via e-Kuber, adhering to the specified timelines and investment limits.
Scheduled Primary Urban Cooperative Banks:
* Impact: These banks can also invest in the auctioned securities.
* Action Required: Submit bids through e-Kuber, following the guidelines and deadlines provided.
Financial Institutions:
* Impact: Opportunity to invest in government securities as part of their asset management strategies.
* Action Required: Evaluate the securities and submit bids through the e-Kuber platform within the given timeframe.
Primary Dealers:
* Impact: PDs play a crucial role in underwriting and distributing government securities.
* Action Required: Submit bids, including consolidated non-competitive bids on behalf of their constituents, through e-Kuber, and facilitate the distribution of securities to investors.
Investors (Individuals and Institutions):
* Impact: Opportunity to invest in government securities with varying maturities and interest rates.
* Action Required: Place orders with banks or PDs to participate in the non-competitive bidding process or submit competitive bids through eligible intermediaries.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for conducting the auction of Government of India dated securities.
Government of India: The issuer of the dated securities being auctioned.
All Scheduled Commercial Banks: A category of financial institutions eligible to participate in the auction.
All State Cooperative Banks: A category of financial institutions eligible to participate in the auction.
All Scheduled Primary Urban Cooperative Banks: A category of financial institutions eligible to participate in the auction.
All Financial Institutions: A category of financial institutions eligible to participate in the auction.
All Primary Dealers: A category of financial institutions eligible to participate in the auction.
Mumbai, Maharashtra: The location of the Reserve Bank of India office where the stocks will be sold.
भारतीय �रजव र् ब�क
RESERVE BANK O F INDIA
www.rbi.org.in
RBI/2019-20/254
Ref.No.IDMD/3065/08.02.032/2019-20 June 15, 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 (issue/re-issue) four dated securities for a notified amount
of ` 30,000 crore as per the following details:
Sr Notified Amount GoI Settlement
Security Auction Date
No (in ` crore) Notification Date
1 5.09% GS 2022 3,000
F.No.4(5)-B
2 5.79% GS 2030 18,000
(W&M)/2020 June 19, 2020 June 22, 2020
dated (Friday) (Monday)
3 New GOI FRB 2033 4,000
June 15, 2020
4 7.19% GS 2060 5,000
Total 30,000
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.
The auction will be spread based for New GOI FRB 2033 and price based for other 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 June 19, 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 June 19, 2020 (Friday) and payment by
successful bidders will be on June 22, 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 April 13, 2022; May 11, 2030; Sep 22, 2033
and Sep 15, 2060 respectively.
(x) The Stocks will qualify for the ready forward facility.
(xi) The Stocks will be eligible for “When Issued” trading during the period June 16 June 19,
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
(Latha Vishwanath)
General Manager