Executive Summary:
The Reserve Bank of India (RBI) announced the auction of four Government of India dated securities for a notified amount of ₹15,000 crore. The auction, conducted by the RBI in Mumbai, will be price-based using a multiple price method. Both competitive and non-competitive bids must be submitted electronically via the RBI’s e-Kuber system by November 10, 2017. Settlement for successful bidders is scheduled for November 13, 2017.
Key Points / Main Content:
Auction Details:
* Four Government of India dated securities will be reissued.
* The total notified amount for the auction is ₹15,000 crore.
* GoI has the option to retain additional subscriptions up to ₹1,000 crore against any security.
* The auction method is price-based using a multiple price method.
* The RBI will conduct the auctions in Mumbai.
Bidding Process:
* Minimum bid amount is ₹10,000 nominal and in multiples thereof.
* Up to 5% of the notified amount will be allotted to eligible individuals and institutions under the Scheme for Non-competitive Bidding.
* Banks/PDs must submit a single consolidated non-competitive bid on behalf of their constituents via e-Kuber.
* Both competitive and non-competitive bids must be submitted electronically via e-Kuber on November 10, 2017.
* Non-competitive bids are accepted between 10:30 a.m. and 11:30 a.m.; competitive bids between 10:30 a.m. and 12:00 noon.
* The aggregate amount of bids by a person should not exceed the notified amount of the auction.
* RBI will determine the minimum price for accepted bids.
Result and Settlement:
* Auction results will be announced on November 10, 2017.
* Payment by successful bidders is due on November 13, 2017.
* Government Stocks will be issued via Subsidiary General Ledger (SGL) account or Stock Certificate.
* Interest will be paid half-yearly.
* The stocks qualify for ready forward facility.
* The Stocks are eligible for When Issued trading during the period November 7 – November 10, 2017.
Repayment Dates:
* 6.84 GS 2022: December 19, 2022
* 6.68 GS 2031: September 17, 2031
* 6.57 GS 2033: December 5, 2033
* 7.06 GS 2046: October 10, 2046
Impact Analysis:
Scheduled Commercial Banks:
* Impact: Can participate in the auction and submit bids on behalf of constituents. Must use the e-Kuber system for bidding.
* Action Required: Submit competitive and non-competitive bids electronically by the specified deadlines.
State Cooperative Banks:
* Impact: Can participate in the auction. Must follow the guidelines for bidding.
* Action Required: Submit bids electronically via e-Kuber by the stipulated deadlines.
Scheduled Primary Urban Cooperative Banks:
* Impact: Eligible to participate in the auction. Must adhere to the bidding procedures.
* Action Required: Submit electronic bids through e-Kuber within the specified timeframe.
Financial Institutions:
* Impact: Can participate in the auction of government securities.
* Action Required: Submit electronic bids via the e-Kuber platform before the deadline.
Primary Dealers:
* Impact: Expected to participate in the auction and submit bids. Required to use the e-Kuber system and submit consolidated non-competitive bids on behalf of constituents.
* Action Required: Submit competitive and non-competitive bids electronically by the deadlines.
Investors:
* Impact: Can invest in Government Stocks through competitive and non-competitive bidding.
* Action Required: Submit bids through their bank or PD via the e-Kuber system by November 10, 2017.
Key Entities Referenced
Scheduled Commercial Banks: All Scheduled Commercial Banks are addressed in the notification regarding the auction of Government of India dated securities.
State Cooperative Banks: All State Cooperative Banks are addressed in the notification regarding the auction of Government of India dated securities.
Scheduled Primary Urban Cooperative Banks: All Scheduled Primary Urban Cooperative Banks are addressed in the notification regarding the auction of Government of India dated securities.
Financial Institutions: All Financial Institutions are addressed in the notification regarding the auction of Government of India dated securities.
Primary Dealers: All Primary Dealers are addressed in the notification regarding the auction of Government of India dated securities.
Government of India Dated Securities: Securities being auctioned by the Government of India, which are the subject of the notification.
Reserve Bank of India: The central bank of India, responsible for conducting the auctions of Government of India dated securities.
Mumbai, Maharashtra: Location where the Reserve Bank of India will conduct the auctions.
RBI/2017-18/83
Ref.No.IDMD/ /08.02.032/2017-18 November 6, 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:
Sr Security Notified GoI Notification Auction Settlement
No Amount Date date
(in ` crore)
1 6.84% GS 2022 3,000
F.No.4(7) W&M/2017
November November
2 6.68% GS 2031 8,000
dated 10, 2017 13, 2017
3 6.57% GS 2033 2,000
November 6, 2017 (Friday) (Monday)
4 7.06% GS 2046 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 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 firm orders
received from their constituents will submit a single consolidated non-competitive bid on behalfof 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 10,
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 10, 2017 (Friday) and payment by
successful bidders will be on November 13, 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; September 17, 2031;
December 5, 2033, and October 10, 2046 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 7 –
November 10, 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