Executive Summary:
The Reserve Bank of India (RBI) announces the auction of five Government of India dated securities for a total notified amount of ₹16,000 crore. The auction, conducted by RBI in Mumbai, will be price-based using a multiple price method. Both competitive and non-competitive bids must be submitted electronically via the RBI Core Banking Solution (e-Kuber) system on January 03, 2020. Payment by successful bidders is due on January 06, 2020.
Key Points / Main Content:
Auction Details:
* Five GoI dated securities will be reissued via auction for a notified amount of ₹16,000 crore.
* GoI retains the option to retain additional subscriptions up to ₹1000 crore against any one or more securities.
* The auction will be 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 and institutions under the Scheme for Non-competitive Bidding.
* Banks/PDs must submit a single consolidated non-competitive bid on behalf of constituents via e-Kuber.
* Both competitive and non-competitive bids must be submitted electronically via e-Kuber on January 03, 2020.
* 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 accepted only in extraordinary circumstances (system failure) via email.
* An investor can submit multiple competitive bids, but the aggregate amount should not exceed the notified auction amount.
* RBI has the discretion to accept or reject any/all bids.
Settlement and Other Details:
* Auction results will be announced on January 03, 2020, and payment is due on January 06, 2020.
* Government Stocks will be issued via Subsidiary General Ledger (SGL) account or Stock Certificate.
* Interest will be paid semi-annually.
* The Stocks will be repaid at par on their respective maturity dates.
* Stocks qualify for Repurchase (Repo) transactions.
* Stocks are eligible for "When Issued" trading from December 31, 2019, to January 03, 2020.
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 must adhere to the specified bidding procedures and timelines.
* Action Required: Submit competitive and/or non-competitive bids electronically through the RBI's e-Kuber system by the specified deadlines (January 03, 2020). Ensure payment by January 06, 2020, if bids are successful.
Eligible Individuals and Institutions under the Scheme for Non-competitive Bidding:
* Impact: These entities can participate in the auction through the non-competitive bidding facility.
* Action Required: Submit firm orders to their bank or PD, who will then submit a consolidated non-competitive bid on their behalf.
Investors:
* Impact: Investors have the opportunity to invest in Government of India dated securities.
* Action Required: Submit bids through the e-Kuber system, adhering to the specified guidelines and timelines. Ensure funds are available for payment on January 06, 2020, if bids are successful.
Reserve Bank of India (RBI):
* Impact: RBI is responsible for conducting the auction and determining the minimum price.
* Action Required: Conduct the auction, announce the results, and manage the settlement process.
Key Entities Referenced
Reserve Bank of India: Central bank of India, responsible for conducting the auctions.
Government of India: The issuer of the dated securities being auctioned.
Mumbai: City in Maharashtra, where the Reserve Bank of India will conduct the auctions.
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.
RBI/2019-20/127
Ref.No.IDMD/1828/08.02.032/2019-20 December 30, 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) five 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 6.17% GS 2021 2,000
2 7.27% GS 2026 2,000 F.No.4(6) January 03, January 06,
3 6.45% GS 2029 7,000 W&M/2019 dated 2020 (Friday) 2020 (Monday)
December 30, 2019
4 7.62% GS 2039 1,000
5 7.63% GS 2059 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 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 03,
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 03, 2020 (Friday) and payment by
successful bidders will be on January 06, 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 December 31, 2019
January 03, 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