Executive Summary:
The Reserve Bank of India (RBI) announces the auction of four Government of India dated securities for a total notified amount of Rs 15,000 crore. The auction, conducted by the RBI in Mumbai, is price-based using a multiple price method. Bids must be submitted electronically via the RBI's e-Kuber system by July 29, 2016, and payment by successful bidders is due on August 01, 2016.
Key Points / Main Content:
Auction Details:
* Four Government of India dated securities will be reissued.
* The total notified amount for auction is Rs 15,000 crore.
* Securities include: 7.80 GS 2021, 7.59 GS 2029, 7.50 GS 2034 and 7.72 GS 2055.
* The auction date is July 29, 2016, with settlement on August 01, 2016.
* The auction method is price-based using a multiple price method.
Bidding Process:
* Minimum bid amount is Rs 10,000 nominal and in multiples thereof.
* Up to 5% of the notified amount will be allotted to eligible individuals/institutions under the Non-Competitive Bidding Facility.
* Competitive and non-competitive bids must be submitted electronically via the RBI's e-Kuber system.
* Physical bids are not accepted except in extraordinary circumstances.
* Non-competitive bids: 10.30 a.m. and 11.30 a.m.
* Competitive bids: 10.30 a.m. and 12.00 noon.
* The aggregate amount of bids submitted by a person in an auction should not exceed the notified amount of auction.
* RBI has the discretion to accept or reject any or all bids.
Post-Auction:
* Auction results will be announced on July 29, 2016.
* Payment by successful bidders is due on August 01, 2016.
* 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 April 11, 2021; March 20, 2029; August 10, 2034; October 26, 2055 respectively.
* The Stocks qualify for the ready forward facility.
* The Stocks are eligible for When Issued trading between July 26-29, 2016.
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 of Government of India dated securities. They are subject to the rules and guidelines outlined in the notification and related circulars.
Action Required: Submit competitive and/or non-competitive bids electronically via the RBI's e-Kuber system by the specified deadlines. Ensure compliance with the terms and conditions of the auction, including minimum bid amounts and payment schedules.
Key Entities Referenced
All State Cooperative Banks: A category of banks eligible to participate in the auction.
Reserve Bank of India: The central bank of India, responsible for conducting the auctions of Government of India dated securities.
All Scheduled Commercial Banks: A category of banks eligible to participate in the auction.
All Scheduled Primary Urban Cooperative Banks: A category of banks eligible to participate in the auction.
All Financial Institutions: A category of institutions eligible to participate in the auction.
All Primary Dealers: A category of financial entities eligible to participate in the auction.
Government of India Dated Securities: Securities being auctioned by the Government of India.
Mumbai, Maharashtra: The city where the Reserve Bank of India will conduct the auctions.
RBI/2016-2017/26
Ref.No.IDMD/188/08.02.032/2016-17 July 25, 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
15,000 crore as per the following details:
Sr Security Notified GoI Notification Auction Settlement
No Amount Date date
(in Rs crore)
4(3)-W&M/2016 dated
1 7.80% GS 2021 3,000
July 25, 2016
4(3)-W&M/2016(i)dated
2 7.59% GS 2029 8,000
July 25, 2016
July 29, 2016 August 01, 2016
4(3)W&M/2016(ii)dated (Wednesday) (Monday)
3 7.50% GS 2034 2,000
July 25, 2016
4(3)-W&M/2016(iii) dated
4 7.72% GS 2055 2,000
July 25, 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 BankingSolution (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 July
29, 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 July 29, 2016 and payment by successful
bidders will be on August 01, 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 April 11, 2021; March 20, 2029; August 10,
2034; 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 July 26 -29, 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,
(Chandan Kumar)
General Manager