**Executive Summary:**
The Reserve Bank of India (RBI) announces the auction of four Government of India dated securities for a total notified amount of ₹15,000 crore. The auction will be price-based using a multiple price method and conducted by the RBI in Mumbai. Bids must be submitted electronically via the RBI's e-Kuber system by November 17, 2017, and payment by successful bidders is due on November 20, 2017.
**Key Points / Main Content:**
**Auction Details:**
* GoI will sell/reissue four dated securities for a notified amount of ₹15,000 crore.
* GoI has the option to retain additional subscription up to ₹1,000 crore against any security, within the ₹15,000 crore limit.
* The auction will be price-based using the multiple price method.
* The Reserve Bank of India at Mumbai will conduct the auctions.
* Auction date: November 17, 2017.
* Settlement date: November 20, 2017.
**Bidding Process:**
* Bids must be submitted electronically via the Reserve Bank of India Core Banking Solution (e-Kuber) system. Physical bids are not accepted except under extraordinary circumstances.
* Minimum bid amount: ₹10,000 (nominal) and in multiples thereof.
* Non-competitive bids: 10:30 a.m. to 11:30 a.m.
* Competitive bids: 10:30 a.m. to 12:00 noon.
* An investor can submit multiple competitive bids, but the aggregate amount should not exceed the notified auction amount.
* Up to 5% of the notified amount will be allotted to eligible individuals and institutions under the Scheme for Non-competitive Bidding.
* Allotment under the noncompetitive segment will be at the weighted average rate of yield/price.
**Result and Payment:**
* Auction results will be announced on November 17, 2017.
* Payment by successful bidders is due on November 20, 2017.
* Government Stocks will be issued by credit to Subsidiary General Ledger Account (SGL) or in the form of Stock Certificates.
**Securities Details:**
* Interest on the Government Stock will be paid half-yearly.
* The Stocks will be repaid at par on specified maturity dates.
* The Stocks will qualify for the ready forward facility.
* The Stocks will be eligible for When Issued trading between November 14 - November 17, 2017.
**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 process for the Government of India dated securities. They must adhere to the bidding process and timelines outlined in the notification.
* Action Required: Submit competitive and/or non-competitive bids electronically through the e-Kuber system by the specified deadlines. Coordinate with constituents for non-competitive bids and ensure timely payment for successful bids.
**Investors (Individuals and Institutions):**
* Impact: Eligible investors can participate in the auction through the non-competitive bidding facility, allowing them to invest in government securities.
* Action Required: Submit firm orders to their bank or PD for non-competitive bidding.
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.
GoI FRB 2024: Government of India Floating Rate Bond maturing in 2024, one of the securities being auctioned.
6.79 GS 2027: Government Stock maturing in 2027 with a coupon rate of 6.79%, one of the securities being auctioned.
7.73 GS 2034: Government Stock maturing in 2034 with a coupon rate of 7.73%, one of the securities being auctioned.
7.72 GS 2055: Government Stock maturing in 2055 with a coupon rate of 7.72%, one of the securities being auctioned.
Mumbai: The location where the Reserve Bank of India will conduct the auctions.
EKuber: The Reserve Bank of India Core Banking Solution system used for submitting bids in electronic format.
RBI/2017-18/90
Ref. No. IDMD/1193/08.02.032/2017-18 November 13, 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 (GoI) has offered to sell (re-issue) four dated securities for notified amount
of ` 15,000 crore as per the following details:
Sr Security Notified GoI Notification Auction Settlement
No Amount Date date
(in ` crore)
1 GoI FRB 2024 3,000
F.No.4(7)-W&M/2017 November November
2 6.79% GS 2027 8,000
dated 17, 2017 20, 2017
3 7.73% GS 2034 2,000
November 13, 2017 (Friday) (Monday)
4 7.72% GS 2055 2,000
Total 15,000
Subject to the limit of ` 15000 Cr being total notified amount, GoI will have the option to retain
additional subscription up to ` 1000 Cr against any of the above security.
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 notification (copy 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 firm
orders received from their constituents will submit a single consolidated non-competitive bid onbehalf 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
November 17, 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 November 17, 2017 (Friday) and payment
by successful bidders will be on November 20, 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 07, 2024; May 15, 2027;
December 19, 2034, 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 November 14 –
November 17, 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