Executive Summary:
The Government of India is offering to sell/reissue four dated securities for a notified amount of ₹15,000 crore via auction conducted by the Reserve Bank of India (RBI). Both competitive and non-competitive bids must be submitted electronically through the RBI's e-Kuber system on August 4, 2017. The auction results will be announced on August 4, 2017, and payment by successful bidders is due on August 7, 2017.
Key Points / Main Content:
Auction Details:
* Four Government of India dated securities will be auctioned.
* The total notified amount for the auction is ₹15,000 crore.
* The auction is price-based and uses a multiple price method.
* RBI Mumbai will conduct the auctions.
Bidding Process:
* Minimum bid amount is ₹10,000 nominal and in multiples of ₹10,000 thereafter.
* Up to 5% of the notified amount will be allotted to eligible individuals and institutions under the Non-Competitive Bidding Facility.
* Banks/Primary Dealers (PDs) must submit a single consolidated non-competitive bid on behalf of their constituents electronically via e-Kuber.
* Both competitive and non-competitive bids must be submitted electronically via e-Kuber on August 4, 2017.
* Non-competitive bids: 10:30 a.m. - 11:30 a.m.
* Competitive bids: 10:30 a.m. - 12:00 noon.
* Physical bids are not accepted, except in extraordinary circumstances.
* Investors can submit multiple competitive bids, but the total bid amount should not exceed the notified auction amount.
* RBI will determine the minimum price for accepting bids and can reject any or all bids.
Settlement and Other Details:
* Auction results will be announced on August 4, 2017.
* Payment by successful bidders is due on August 7, 2017.
* Government Stocks will be issued via Subsidiary General Ledger (SGL) account or Stock Certificate.
* Interest will be paid half-yearly.
* The Stocks will be repaid at par on their respective maturity dates: December 19, 2022; December 26, 2029; December 5, 2033; and October 26, 2055.
* The Stocks qualify for the ready forward facility.
* The Stocks are eligible for When Issued trading between August 1 - August 4, 2017.
Impact Analysis:
Scheduled Commercial Banks, State Cooperative Banks, Scheduled Primary Urban Cooperative Banks, Financial Institutions, Primary Dealers:
Impact: These entities can participate in the auction of Government of India dated securities. They are also responsible for submitting consolidated non-competitive bids on behalf of their constituents.
Action Required: Submit competitive and/or non-competitive bids electronically through the RBI's e-Kuber system on August 4, 2017, within the specified timeframes.
Eligible Individuals and Institutions under the Scheme for Non-Competitive Bidding Facility:
Impact: They can participate in the auction through the non-competitive bidding facility, with allotments up to 5% of the notified amount.
Action Required: Submit firm orders to their bank or PD, who will then submit a consolidated non-competitive bid on their behalf.
Investors:
Impact: Can invest in Government of India dated securities.
Action Required: Submit bids through the e-Kuber system and ensure funds are available for payment on August 7, 2017, if the bid is successful.
Key Entities Referenced
Reserve Bank of India: Central bank of India, conducting the auctions of Government of India dated securities.
Government of India: Issuer of dated securities being auctioned.
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.
Mumbai, Maharashtra: Location where the Reserve Bank of India will conduct the auctions.
RBI/2017-18/30
Ref.No.IDMD/248/08.02.032/2017-18 July 31, 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 (re-issue) four dated securities for notified amount of `
15,000 crore as per the following details:
Notified
Sr Auction Settlement
Security Amount GoI Notification
No Date date
(in ` crore)
4(7)-W&M/2017 dated
1 6.84% GS 2022 3,000
July 31, 2017
4(7)-W&M/2017(i)dated
2 6.79% GS 2029 7,000 August 4, August 7,
July 31, 2017.
2017 2017
4(7)-W&M/2017(ii) dated
3 6.57% GS 2033 2,000 (Friday) (Monday)
July 31, 2017.
4(7)-W&M/2017(iii) dated
4 7.72% GS 2055 3,000
July 31, 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 ` 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 firmorders 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 4, 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 August 4, 2017 (Friday) and payment by
successful bidders will be on August 7, 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 December 19, 2022; December 26, 2029;
December 5, 2033, and October 26, 2055 respectively.
(ix) The Stocks will qualify for the ready forward facility.
(x) The Stocks will be eligible for “When Issued” trading during the period August 1- August
4, 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
(Latha Vishwanath)
General Manager