Executive Summary:
The Reserve Bank of India (RBI) announces the auction of four Government of India dated securities for a notified amount of ₹12,000 crore. The auction, conducted by RBI Mumbai, is price-based using a multiple price method. Bids must be submitted electronically via the RBI Core Banking Solution E-Kuber system on March 8, 2019, with payment by successful bidders due on March 11, 2019.
Key Points / Main Content:
Auction Details:
* Four Government of India dated securities will be reissued for a total notified amount of ₹12,000 crore.
* Government has the option to retain additional subscription up to ₹1,000 crore against any one or more of the securities.
* The auction is price-based using a multiple price method.
* RBI Mumbai will conduct the auctions.
Bidding Process:
* Stocks will be issued for a minimum amount of ₹10,000 nominal and in multiples of ₹10,000 thereafter.
* Up to 5% of the notified amount will be allotted to eligible individuals/institutions under the Non-Competitive Bidding Facility.
* Banks/Primary Dealers (PDs) must submit a single consolidated non-competitive bid on behalf of their constituents via the E-Kuber system.
* Both competitive and non-competitive bids must be submitted electronically via the E-Kuber system on March 8, 2019.
* Non-competitive bids should be submitted between 11:30 a.m. and 12:00 noon; competitive bids between 11:30 a.m. and 12:30 p.m.
* Physical bids are accepted only in the event of system failure.
* 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 or all bids.
Settlement and Other Details:
* Auction results will be announced on March 8, 2019.
* Payment by successful bidders is due on March 11, 2019.
* 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.
* The Stocks will qualify for the ready forward facility.
* The Stocks will be eligible for "When Issued" trading between March 5-8, 2019.
Impact Analysis:
Scheduled Commercial Banks, State Cooperative Banks, Scheduled Primary Urban Cooperative Banks, Financial Institutions, and Primary Dealers:
Impact: These entities are directly involved in the auction process and are responsible for submitting bids on behalf of themselves and their constituents. They are also impacted by the terms and conditions governing the issue of the stocks.
Action Required:
* Submit competitive and/or non-competitive bids electronically via the E-Kuber system within the specified timelines.
* Ensure compliance with the terms and conditions of the auction and stock issuance.
* Inform constituents about the auction details and facilitate their participation.
Eligible Individuals and Institutions (Under Non-Competitive Bidding Facility):
Impact: These entities have the opportunity to participate in the auction through the Non-Competitive Bidding Facility, allowing them to acquire government securities without directly competing on price.
Action Required:
* Submit firm orders to their bank or PD to participate in the non-competitive bidding process.
Investors:
Impact: Investors are provided with an opportunity to invest in government securities with fixed maturity dates and interest payments.
Action Required:
* Evaluate the terms of the securities and submit competitive bids via the E-Kuber system, or participate through the non-competitive bidding facility via their bank/PD.
Key Entities Referenced
Government of India: The issuer of the dated securities being auctioned.
Reserve Bank of India: The central bank of India, responsible for conducting the auction.
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: The city where the Reserve Bank of India will conduct the auctions.
RBI/2018-19/134
Ref.No.IDMD/2459/08.02.032/2018-19 March 1, 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) four dated securities for a notified amount of
`12,000 crore as per the following details:
Notified
Sr Settlement
Security Amount GoI Notification Auction Date
No date
(in ` crore)
1 7.32% GS 2024 3,000
2 7.26% GS 2029 4,000 F.No.4(6) March 8, 2019 March 11, 2019
W&M/2018 dated
3 8.24% GS 2033 2,000 (Friday) (Monday)
March 1, 2019
4 7.72% GS 2055 3,000
Total 12,000
Subject to the limit of `12000 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 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 March 8, 2019.
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 March 8, 2019 (Friday) and payment by
successful bidders will be on March 11, 2019 (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 Jan 28, 2024; Jan 14, 2029; Nov 10, 2033;
Oct 26, 2055 respectively.
(x) The Stocks will qualify for the ready forward facility.
(xi) The Stocks will be eligible for “When Issued” trading during the period March 5 – March 8,
2019 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