Executive Summary:
The Reserve Bank of India announces the auction of four Government of India dated securities for a total notified amount of Rs 11,000 crore. The auction will be price based using a multiple price method and conducted by the RBI in Mumbai. Both competitive and non-competitive bids must be submitted electronically via the RBI's e-Kuber system by February 3, 2017, with settlement on February 6, 2017.
Key Points / Main Content:
Auction Details:
* Four Government of India dated securities will be auctioned/reissued.
* Total notified amount: Rs 11,000 crore.
* Auction is price based using multiple price method.
* RBI Mumbai will conduct the auctions.
* Auction date: February 3, 2017.
* Settlement date: February 6, 2017.
Bidding Process:
* Minimum bid amount: Rs.10,000 nominal and in multiples of Rs 10,000 thereafter.
* Up to 5% of the notified amount is reserved for non-competitive bids from eligible individuals/institutions.
* Non-competitive bids must be submitted between 10:30 a.m. and 11:30 a.m.
* Competitive bids must be submitted between 10:30 a.m. and 12:00 noon.
* Bids must be submitted electronically via RBI's e-Kuber system.
* Physical bids are not accepted except in extraordinary circumstances.
* The aggregate amount of bids submitted by a person in an auction should not exceed the notified amount of auction.
* RBI determines the minimum price and can accept or reject bids.
* Auction results will be announced on February 3, 2017.
Securities Details:
* Stocks will be issued via Subsidiary General Ledger (SGL) account or Stock Certificate.
* Interest will be paid half-yearly.
* Maturity dates: November 7, 2024; December 26, 2029; December 5, 2033; and November 28, 2051, respectively.
* Stocks qualify for ready forward facility.
* Eligible for When Issued trading from January 31 - February 3, 2017, as per RBI guidelines.
Impact Analysis:
Scheduled Commercial Banks, State Cooperative Banks, Scheduled Primary Urban Cooperative Banks, Financial Institutions, and Primary Dealers
Impact: Must adhere to the specified bidding process and timelines for participating in the auction of Government of India dated securities.
Action Required: Submit competitive and/or non-competitive bids electronically via the RBI's e-Kuber system within the stipulated timeframes on February 3, 2017. Ensure compliance with all terms and conditions outlined in the notifications.
Eligible Individuals and Institutions (under Non-Competitive Bidding Scheme)
Impact: Opportunity to 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 via the RBI's e-Kuber system between 10:30 a.m. and 11:30 a.m. on February 3, 2017.
Investors:
Impact: Can invest in Government Stocks.
Action Required: Investors can submit more than one competitive bid at different prices in electronic format on the Reserve Bank of India Core Banking Solution EKuber system. However, the aggregate amount of bids submitted by a person in an auction should not exceed the notified amount of auction.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for conducting the auctions.
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, India, where the Reserve Bank of India will conduct the auctions.
RBI/2016-17/218
Ref. No. IDMD/1977/08.02.032/2016-17 January 30, 2017
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 notified
amount of Rs 11,000 crore as per the following details:
Sr Security Notified GoI Notification Auction Settlement
No Amount Date date
(in Rs crore)
4(3)-W&M/2016 dated
1 GoI FRB 2024
2,000 January 30, 2017.
5,000 4(3)-W&M/2016(i) dated
2 6.79% GS 2029
January 30, 2017.
February February
03, 2017 06, 2017
3 6.57% GS 2033 4(3)-W&M/2016(ii) dated (Friday) (Monday)
2,000 January 30, 2017.
4(3)-W&M/2016(iii) dated
4 6.62% GS 2051 2,000 January 30, 2017.
Total 11,000
The auction for securities 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 (13)–W&M/2008, dated
October 8, 2008 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 Rs.10,000/- (nominal) and in multiples of
Rs 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
February 03, 2017. 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 11.30
a.m. and the competitive bids should be submitted between 10.30 a.m. and 12.00 noon.
(iv) An investor can submit more than one competitive bid at different prices 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.
(v) 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.
(vi) The result of the auctions will be announced on February 03, 2017 (Friday). and payment by
successful bidders will be on February 06, 2017. (Monday).
(vii) 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.
(viii) The Government Stocks will be repaid at par on November 7, 2024; December 26, 2029;
December 5, 2033, and November 28, 2051 respectively.
(ix) The Stocks will qualify for the ready forward facility.
(x) The Stocks will be eligible for “When Issued” trading during the period January 31—
February 03, 2017, in accordance with guidelines on ‘When Issued’ transactions in Central
Government Securities issued by Reserve Bank of India vide circular No.RBI /2006-07/178
dated November 16, 2006 as amended from time to time.
Yours faithfully
(Chandan Kumar)
General Manager