Executive Summary:
The Reserve Bank of India (RBI) announces the auction of three Government of India dated securities for a total notified amount of ₹30,000 crore. The auction will be conducted through the RBI's Mumbai Office, with both competitive and non-competitive bids to be submitted electronically via the e-Kuber system on June 12, 2020. Payment by successful bidders is due on June 15, 2020.
Key Points / Main Content:
Auction Details:
* Three Government of India dated securities will be auctioned:
* New GS 2025 for ₹12,000 crore
* 6.19 GS 2034 for ₹11,000 crore
* 7.16 GS 2050 for ₹7,000 crore
* GoI has the option to retain additional subscriptions up to ₹2,000 crore against any one or more securities.
* The auction will be yield-based for the new security and price-based for other securities, using a multiple price method.
* The stocks will be issued for a minimum amount of ₹10,000 nominal and in multiples of ₹10,000 thereafter.
Bidding Process:
* Up to 5% of the notified amount will be allotted to eligible individuals and institutions under the Scheme for Non-competitive Bidding.
* Competitive and non-competitive bids must be submitted electronically on the RBI’s e-Kuber system on June 12, 2020.
* Non-competitive bids: 10:30 a.m. to 11:00 a.m.
* Competitive bids: 10:30 a.m. to 11:30 a.m.
* Physical bids are accepted only in the event of system failure.
* The aggregate amount of bids submitted by a person in an auction should not exceed the notified amount of auction.
* RBI will determine the minimum price and can accept or reject bids.
Post-Auction:
* Auction results will be announced on June 12, 2020.
* Payment by successful bidders is due on June 15, 2020.
* Government Stocks will be issued via Subsidiary General Ledger Account (SGL) or Stock Certificate.
* Interest will be paid half-yearly.
* The stocks will be repaid at par on their respective maturity dates: June 15, 2025, September 16, 2034, and September 20, 2050.
* The Stocks will qualify for the ready forward facility.
* The Stocks will be eligible for "When Issued" trading between June 09 - June 12, 2020.
Impact Analysis:
Scheduled Commercial Banks, State Cooperative Banks, Scheduled Primary Urban Cooperative Banks, Financial Institutions, and Primary Dealers:
Impact: Affected by the auction of Government of India dated securities and must adhere to the specified bidding process and timelines.
Action Required: Submit competitive and/or non-competitive bids electronically via the e-Kuber system by the specified deadlines on June 12, 2020, and ensure payment by June 15, 2020, if successful.
Eligible Individuals and Institutions under the Scheme for Non-competitive Bidding:
Impact: Have the opportunity to participate in the auction through the non-competitive bidding facility, with up to 5% of the notified amount allocated to this segment.
Action Required: Submit firm orders to their bank or Primary Dealer (PD), who will then submit a consolidated non-competitive bid on their behalf via the e-Kuber system.
Investors:
Impact: Can invest in Government Stocks with half-yearly interest payments and repayment at par on maturity.
Action Required: Evaluate the securities and submit competitive bids through the e-Kuber system, ensuring the aggregate amount of bids does not exceed the notified amount.
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 through which the stocks will be sold.
RBI/2019-20/253
Ref.No.3027/IDMD/08.02.032/2019-20 June 08, 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) three dated securities for a notified amount
of `30,000 crore as per the following details:
Notified
Sr Settlement
Security Amount GoI Notification Auction Date
No date
(in ` crore)
1 New GS 2025 12,000
F.No.4(5)
June 12, 2020 June 15, 2020
2 6.19% GS 2034 11,000 W&M/2020 dated
(Friday) (Monday)
June 08, 2020
3 7.16% GS 2050 7,000
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 yield based for new security 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 itsconstituents 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 12, 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 12, 2020 (Friday) and payment by
successful bidders will be on June 15, 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 June 15, 2025, Sep 16, 2034 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 June 09 June 12,
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