Executive Summary:
The Reserve Bank of India (RBI) announced the auction of four Government of India dated securities for a notified amount of Rs 14,000 crore. The auctions will be price-based using a multiple price method, conducted by the RBI in Mumbai. Both competitive and non-competitive bids must be submitted electronically via the RBI's EKuber system by February 5, 2016, with payment due on February 8, 2016.
Key Points / Main Content:
* **Auction Details:**
* Four Government of India dated securities will be reissued.
* The total notified amount is Rs 14,000 crore.
* Auction date: February 05, 2016; Settlement date: February 08, 2016.
* The auctions will be price-based using multiple price method.
* **Bidding Process:**
* Minimum bid amount: Rs.10,000 nominal and in multiples of Rs 10,000 thereafter.
* Up to 5% of the notified amount will be allotted to eligible individuals/institutions under the Non-competitive Bidding Facility.
* Both competitive and non-competitive bids must be submitted electronically via the RBI's EKuber system.
* Non-competitive bids: 10.30 a.m. and 11.30 a.m.; Competitive bids: 10.30 a.m. and 12.00 noon on February 05, 2016.
* The aggregate amount of bids submitted by a person in an auction should not exceed the notified amount of auction.
* RBI has the right to accept or reject any or all bids.
* Auction results will be announced on February 05, 2016.
* **Securities Issuance and Terms:**
* Securities will be issued via Subsidiary General Ledger Account (SGL) or Stock Certificate.
* Interest will be paid half-yearly.
* Repayment dates: December 15, 2023; January 11, 2026; December 19, 2034; December 01, 2044 respectively.
* The stocks will qualify for the ready forward facility.
* Eligible for When Issued trading between February 02, 2016 – February 05, 2016.
Impact Analysis:
All Scheduled Commercial Banks
* Impact: Must participate in the auction process if they wish to acquire the Government of India dated securities.
* Action Required: Submit competitive and/or non-competitive bids electronically via the RBI's EKuber system by the specified deadlines.
All State Cooperative Banks
* Impact: Must participate in the auction process if they wish to acquire the Government of India dated securities.
* Action Required: Submit competitive and/or non-competitive bids electronically via the RBI's EKuber system by the specified deadlines.
All Scheduled Primary Urban Cooperative Banks
* Impact: Must participate in the auction process if they wish to acquire the Government of India dated securities.
* Action Required: Submit competitive and/or non-competitive bids electronically via the RBI's EKuber system by the specified deadlines.
All Financial Institutions
* Impact: Must participate in the auction process if they wish to acquire the Government of India dated securities.
* Action Required: Submit competitive and/or non-competitive bids electronically via the RBI's EKuber system by the specified deadlines.
All Primary Dealers
* Impact: Must participate in the auction process if they wish to acquire the Government of India dated securities, including submitting consolidated non-competitive bids for their constituents.
* Action Required: Submit competitive and/or non-competitive bids electronically via the RBI's EKuber system by the specified deadlines, and submit a single consolidated noncompetitive bid on behalf of all its constituents in electronic format.
Investors (eligible individuals and institutions)
* Impact: Have the opportunity to invest in Government of India dated securities.
* Action Required: Submit bids through banks or Primary Dealers.
Key Entities Referenced
Reserve Bank of India: Central bank of India, responsible for conducting the auctions.
Government of India: Issuer of the dated securities being auctioned.
All Scheduled Commercial Banks: One of the entities to whom the circular is addressed.
All State Cooperative Banks: One of the entities to whom the circular is addressed.
All Scheduled Primary Urban Cooperative Banks: One of the entities to whom the circular is addressed.
All Financial Institutions: One of the entities to whom the circular is addressed.
All Primary Dealers: One of the entities to whom the circular is addressed.
Mumbai, Maharashtra: Location where the Reserve Bank of India will conduct the auctions.
RBI/2015-16/304
Ref. No. IDMD/ 1707 /08.02.032/2015-16 February 01, 2016
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 Rs
14,000 crore as per the following details:
Sr Security Notified GoI Notification Auction Date Settlement
No Amount (in date
Rs crore)
4(2)-W&M/2015 dated
1 7.68% GS 2023 3,000
February 01, 2016
4(2)-W&M/2015
2 7.59% GS 2026 8,000 (ii)dated
February 05, February 08,
February 01, 2016
2016 (Friday) 2016 (Monday)
4(2)-W&M/2015(ii)
3 7.73% GS2034 1,000
dated February 01, 2016
4(2)-W&M/2015(iii)
4 8.17% GS 2044 2,000 dated
February 01, 2016.
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
February 05, 2016. 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 February 05, 2016 and payment by
successful bidders will be on February 08, 2016 (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 15, 2023; January 11, 2026;
December 19, 2034; December 01, 2044 respectively.
(ix) The Stocks will qualify for the ready forward facility.
(x) The Stocks will be eligible for “When Issued” trading during the period February 02,
2016– February 05, 2016 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
(P K pati)
General Manager