Executive Summary:
The Government of India is offering to sell/reissue five dated securities for a notified amount of ₹14,000 crore through an auction conducted by the Reserve Bank of India (RBI) at Mumbai. The auction, which is price-based and uses a multiple price method, will take place on January 31, 2020, with payment due on February 03, 2020. Both competitive and non-competitive bids must be submitted electronically via the RBI's e-Kuber system.
Key Points / Main Content:
Auction Details:
* Five Government of India dated securities will be reissued for a total notified amount of ₹14,000 crore.
* GoI has the option to retain additional subscriptions up to ₹1,000 crore against any one or more securities.
* The auction is price-based, using a multiple price method.
* RBI Mumbai will conduct the auctions.
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/institutions under the Non-Competitive Bidding Facility.
* Banks/PDs must submit a single consolidated non-competitive bid on behalf of their constituents via e-Kuber.
* Both competitive and non-competitive bids must be submitted electronically via the RBI e-Kuber system on January 31, 2020.
* Non-competitive bids: 11:30 a.m. and 12:00 noon.
* Competitive bids: 11:30 a.m. and 12:30 p.m.
* Physical bids are only accepted in extraordinary circumstances (system failure) via email, before the auction timing ends.
* Investors can submit multiple competitive bids, but the aggregate amount should not exceed the notified amount.
* RBI has the discretion to accept or reject any or all bids.
Result and Settlement:
* Auction results will be announced on January 31, 2020.
* Payment by successful bidders is due on February 03, 2020.
* Stocks will be issued by credit to SGL accounts or in the form of Stock Certificates.
* Interest on the Government Stock will be paid half-yearly.
* The Stocks will be repaid at par on Jul 15, 2021; Apr 08, 2026; Oct 07, 2029; Sep 15, 2039; Jun 17, 2059 respectively.
Other Conditions:
* The Stocks qualify for Repo transactions.
* The Stocks are eligible for When Issued trading between January 28, 2020, and January 31, 2020.
Impact Analysis:
All Scheduled Commercial Banks / All State Cooperative Banks / All Scheduled Primary Urban Cooperative Banks / All Financial Institutions / All Primary Dealers:
* Impact: These entities can participate in the auction of Government of India dated securities.
* Action Required: Submit competitive and/or non-competitive bids electronically through the RBI e-Kuber system within the specified timeframe on January 31, 2020.
Eligible Individuals and Institutions under the Scheme for Non-Competitive Bidding Facility:
* Impact: Opportunity to acquire Government Stocks through the non-competitive bidding process.
* Action Required: Submit firm orders to their bank or PD to be included in a consolidated non-competitive bid.
Investors:
* Impact: Opportunity to invest in Government of India dated securities.
* Action Required: Submit bids through the RBI e-Kuber system, adhering to the specified guidelines and timelines.
Key Entities Referenced
Reserve Bank of India: Central bank of India, responsible for conducting the auctions and determining the minimum price for Government Stock.
Government of India: Issuer of the dated securities being auctioned.
All Scheduled Commercial Banks: One of the entities to whom the circular is addressed and eligible to participate in the auction.
All State Cooperative Banks: One of the entities to whom the circular is addressed and eligible to participate in the auction.
All Scheduled Primary Urban Cooperative Banks: One of the entities to whom the circular is addressed and eligible to participate in the auction.
All Financial Institutions: One of the entities to whom the circular is addressed and eligible to participate in the auction.
All Primary Dealers: One of the entities to whom the circular is addressed and eligible to participate in the auction.
Mumbai, Maharashtra: Location where the Reserve Bank of India will conduct the auctions.
RBI/2019-20/153
Ref.No.IDMD/2132/08.02.032/2019-20 January 27, 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 (re-issue) five dated securities for a notified amount of
₹14,000 crore as per the following details:
Notified
Sr Settlement
Security Amount GoI Notification Auction Date
No date
(in ₹ crore)
1 6.17% GS 2021 2,000
2 7.27% GS 2026 2,000 F.No.4(6) January 31, February 03,
3 6.45% GS 2029 5,000 W&M/2019 dated 2020 (Friday) 2020 (Monday)
January 27, 2020
4 7.62% GS 2039 1,000
5 7.63% GS 2059 4,000
Total 14,000
Subject to the limit of ₹14,000 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 January 31,
2020. 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 January 31, 2020 (Friday) and payment by
successful bidders will be on February 03, 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 Jul 15, 2021; Apr 08, 2026; Oct 07, 2029;
Sep 15, 2039; Jun 17, 2059 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 January 28, 2020–
January 31, 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
July 24, 2018 as amended from time to time.
Yours faithfully
(Arvind Kumar)
General Manager