**Executive Summary:**
The Reserve Bank of India announces the auction of four Government of India dated securities for a total notified amount of Rs 15,000 crore. The auction, price-based using a multiple price method, will be conducted by the RBI in Mumbai. Bids must be submitted electronically via the e-Kuber system on April 7, 2017, and payment by successful bidders is due on April 10, 2017.
**Key Points / Main Content:**
* **Securities Offered:**
* GoI FRB 2024
* 6.79% GS 2029
* 6.57% GS 2033
* 6.62% GS 2051
* **Auction Details:**
* Price-based auction using multiple price method.
* Conducted by the Reserve Bank of India in Mumbai.
* Minimum investment: Rs. 10,000 nominal and in multiples thereof.
* **Bidding Process:**
* Both competitive and non-competitive bids must be submitted electronically on the e-Kuber system.
* Non-competitive bids: 10.30 a.m. and 11.30 a.m. on April 7, 2017.
* Competitive bids: 10.30 a.m. and 12.00 noon on April 7, 2017.
* Non-competitive bidding is capped at 5% of the notified amount.
* Aggregate bids by a single entity cannot exceed the notified amount.
* RBI has the discretion to accept or reject bids.
* **Post-Auction:**
* Auction results announced on April 7, 2017.
* Payment by successful bidders due on April 10, 2017.
* Securities issued via SGL account or Stock Certificate.
* Interest paid half-yearly.
* Repayment at par on specified maturity dates for each security.
* Stocks qualify for ready forward facility and "when issued" trading (April 5-7, 2017).
**Impact Analysis:**
**Scheduled Commercial Banks, State Cooperative Banks, Scheduled Primary Urban Cooperative Banks, Financial Institutions, and Primary Dealers:**
* *Impact:* Must facilitate bidding for themselves and their constituents, and manage resulting security holdings.
* *Action Required:* Submit competitive and non-competitive bids electronically via e-Kuber within the specified timeframes on April 7, 2017. Ensure timely payment for successful bids on April 10, 2017.
**Eligible Individuals and Institutions (under Non-Competitive Bidding Facility):**
* *Impact:* Opportunity to participate in the auction without directly competing on price.
* *Action Required:* Submit firm orders to their bank or PD for consolidated non-competitive bidding.
**Investors:**
* *Impact:* Will be impacted by the minimum price set by the RBI.
* *Action Required:* Await results.
Key Entities Referenced
Government of India: The issuer and seller of dated securities in this notification.
Reserve Bank of India: The central bank of India, responsible for conducting the auctions of Government of India dated securities.
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 institutions eligible to participate in the auction.
All Primary Dealers: A category of financial institutions eligible to participate in the auction.
F. No. 4 13WM2008: General Notification issued by Government of India related to the auction of Government Securities.
RBI/2016-17/266
Ref. No. IDMD/2580/08.02.032/2016-17 April 03, 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 15,000 crore as per the following details:
Sr Security Notified GoI Notification Auction Settlement
No Amount Date date
(in Rs crore)
4(3)-W&M/2017 dated
1 GoI FRB 2024
3,000 April 03, 2017 .
7,000 4(3)-W&M/2017(i)
2 6.79% GS 2029
dated April 03, 2017 April 07, 2017 April 10, 2017
2,000 4(3)-W&M/2017(ii) (Friday) (Monday)
6.57% GS 2033
3
dated April 03, 2017.
3,000 4(3)-W&M/2017(iii)
4 6.62% GS 2051
dated April 03, 2017.
Total 15,000
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
April 07, 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 April 07, 2017 (Friday). and payment by
successful bidders will be on April 10, 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 April 5—April 7,
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
(Arun Bhagoliwal)
Deputy General Manager