Executive Summary:
The Reserve Bank of India (RBI) announces the auction of four Government of India dated securities for a notified amount of ₹17,000 crore. The auction will be price-based using a multiple price method, conducted by the RBI in Mumbai. Competitive and non-competitive bids must be submitted electronically via the RBI's e-Kuber system on August 16, 2019, with payment by successful bidders due on August 19, 2019.
Key Points / Main Content:
Auction Details:
* Four Government of India dated securities will be reissued for a total notified amount of ₹17,000 crore.
* GoI has the option to retain additional subscriptions up to ₹1000 crore against any one or more of the 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.
* Both competitive and non-competitive bids must be submitted electronically on the RBI's e-Kuber system on August 16, 2019.
* Non-competitive bids: 11:30 a.m. - 12:00 noon; competitive bids: 11:30 a.m. - 12:30 p.m.
* Physical bids are only accepted in the event of system failure.
Auction Outcome:
* RBI will determine the minimum price for accepted bids and reserves the right to accept or reject bids.
* Auction results will be announced on August 16, 2019.
* Payment by successful bidders is due on August 19, 2019.
Securities Issuance and Terms:
* Stocks will be issued via Subsidiary General Ledger (SGL) account credit or Stock Certificate.
* Interest will be paid semi-annually.
* Stocks will be repaid at par on their respective maturity dates.
* The stocks qualify for Repurchase (Repo) transactions.
* The Stocks will be eligible for When Issued trading between August 13 - August 16, 2019.
Impact Analysis:
Scheduled Commercial Banks, State Cooperative Banks, Scheduled Primary Urban Cooperative Banks, Financial Institutions, and Primary Dealers:
* Impact: These entities can participate in the auction of Government of India dated securities. They are subject to the terms and conditions outlined in the notification, including electronic bidding procedures and deadlines.
* Action Required: Submit competitive and/or non-competitive bids electronically via the RBI's e-Kuber system by the specified deadlines on August 16, 2019. Ensure funds are available for payment by August 19, 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, allowing them to acquire government securities.
* Action Required: Submit firm orders to their bank or Primary Dealer (PD) for non-competitive bids.
Reserve Bank of India (RBI):
* Impact: The RBI is responsible for conducting the auction, determining the minimum price, and announcing the results.
* Action Required: Conduct the auction on August 16, 2019, announce results, and process payments on August 19, 2019.
Government of India (GoI):
* Impact: The GoI is offering the dated securities for sale to raise funds.
* Action Required: Monitor the auction results and manage the funds raised.
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: 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: City in Maharashtra, location where the Reserve Bank of India will conduct the auctions.
RBI/2019-20/38
Ref. No. IDMD/423/08.02.032/2019-20 August 09, 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 ₹
17,000 crore as per the following details:
Notified
Sr Settlement
Security Amount GoI Notification Auction Date
No date
(in ₹ crore)
1 7.32% GS 2024 5,000
2 7.26% GS 2029 6,000 F.No.4(6) August 16, August 19,
2019
3 7.69% GS 2043 2,000 W&M/2019 dated 2019 (Friday)
(Monday)
August 09, 2019
4 7.72% GS 2049 4,000
Total 17,000
Subject to the limit of ₹ 17000 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 August 16,
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 August 16, 2019 (Friday) and payment by
successful bidders will be on August 19, 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 Jan 28, 2024; Jan 14, 2029; 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 August 13 – August 16,
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