Executive Summary:
The Reserve Bank of India (RBI) announces the auction of four Government of India dated securities for a notified amount of ₹16,000 crore. The auction will be yield-based for the new security and price-based for the other securities, using a multiple price method. Bids must be submitted electronically via the RBI’s e-Kuber system by November 1, 2019, and payment by successful bidders is due on November 4, 2019.
Key Points / Main Content:
Auction Details:
* Four Government of India dated securities will be auctioned.
* The total notified amount for the auction is ₹16,000 crore.
* GoI has the option to retain additional subscription up to ₹1000 crore against any one or more of the above securities.
* The auction will be conducted by the Reserve Bank of India in Mumbai.
* The auction is yield-based for the new security and price-based for other securities, using a multiple price method.
Bidding Process:
* Minimum bid 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/institutions under the Non-competitive Bidding Facility.
* Competitive and non-competitive bids must be submitted electronically via the RBI e-Kuber system on November 1, 2019.
* Non-competitive bids: 11:30 a.m. to 12:00 noon.
* Competitive bids: 11:30 a.m. to 12:30 p.m.
* Physical bids are only accepted 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 has the discretion to accept or reject any or all bids.
Settlement and Other Details:
* Auction results will be announced on November 1, 2019.
* Payment by successful bidders is due on November 4, 2019.
* 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 Nov 04, 2024; Dec 07, 2031; Jun 17, 2043; Jun 15, 2049 respectively.
* The Stocks will qualify for Repurchase transactions (Repo).
* The Stocks will be eligible for When Issued trading during the period October 29 – November 01, 2019.
Impact Analysis:
Scheduled Commercial Banks, State Cooperative Banks, Scheduled Primary Urban Cooperative Banks, Financial Institutions, and Primary Dealers
Impact: These entities are eligible to participate in the auction of Government of India dated securities. They are subject to the terms and conditions outlined in the notification and related circulars.
Action Required: Prepare and submit competitive and/or non-competitive bids electronically via the RBI e-Kuber system by the specified deadlines. Ensure sufficient funds are available for payment by November 4, 2019, if bids are successful.
Investors (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 Primary Dealer (PD) in a timely manner to allow the bank/PD to submit a single consolidated non-competitive bid on their behalf.
Reserve Bank of India (RBI):
Impact: The RBI is responsible for conducting the auction and determining the minimum price for accepted bids.
Action Required: Conduct the auction, announce the results, and facilitate the settlement process.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for conducting the auctions of Government of India dated securities.
Government of India: The issuer of the dated securities being auctioned.
All Scheduled Commercial Banks: Entities eligible to participate in the auction.
All State Cooperative Banks: Entities eligible to participate in the auction.
All Scheduled Primary Urban Cooperative Banks: Entities eligible to participate in the auction.
All Financial Institutions: Entities eligible to participate in the auction.
All Primary Dealers: Entities eligible to participate in the auction.
F.No.42WM2018, dated March 27, 2018: General Notification issued by Government of India regarding the terms and conditions governing the issue of stocks.
भारतीय �रज़व र् बक�
RESERVE BANK OF INDIA
RBI/2019-20/85
Ref.No.IDMD/1125/08.02.032/2019-20 October 25, 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 (issue/re-issue) four dated securities for a notified amount
of `16,000 crore as per the following details:
Notified
Sr Settlement
Security Amount GoI Notification Auction Date
No date
(in ` crore)
1 New GS 2024 4,000
2 GoI FRB 2031 6,000 F.No.4(6) November 01, November 04,
W&M/2019 dated
3 7.69% GS 2043 2,000 2019 (Friday) 2019 (Monday)
October 25, 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 be yield based (for the new security) and price based (for other securities), 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 November 01,
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 November 01, 2019 (Friday) and payment by
successful bidders will be on November 04, 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 October 29 – November
01, 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
(Latha Vishwanath)
General Manager