Executive Summary:
The Reserve Bank of India (RBI) announces the auction of four Government of India dated securities for a total notified amount of ₹17,000 crore. The auction, conducted by RBI Mumbai, will be price-based using a multiple price method. Competitive and non-competitive bids must be submitted electronically via the RBI's e-Kuber system on July 5, 2019, with payment by successful bidders due on July 8, 2019.
Key Points / Main Content:
Auction Details:
* Four Government of India dated securities will be reissued.
* The total notified amount for the auction is ₹17,000 crore.
* GoI has the option to retain additional subscription up to ₹1000 crore against any one or more of the securities.
* The auction will be price-based using multiple price method.
* RBI Mumbai will conduct the auctions.
Bidding Process:
* Minimum bid amount is ₹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.
* Competitive and non-competitive bids must be submitted electronically on the RBI e-Kuber system.
* Non-competitive bids: 11:30 a.m. - 12:00 noon on July 5, 2019.
* Competitive bids: 11:30 a.m. - 12:30 p.m. on July 5, 2019.
* Physical bids are only accepted in case of system failure.
Auction Outcome and Settlement:
* RBI determines the minimum price for accepted bids.
* RBI has the right to accept or reject any bid.
* Auction results will be announced on July 5, 2019.
* Payment by successful bidders is due on July 8, 2019.
Securities Issuance and Terms:
* Government Stocks will be issued via Subsidiary General Ledger (SGL) account or Stock Certificate.
* Interest will be paid half-yearly.
* Repayment at par on specified maturity dates (Jan 28, 2024; Jan 14, 2029; Jun 17, 2043; Jun 15, 2049).
* The stocks qualify for Repo transactions.
* The Stocks will be eligible for When Issued trading during the period July 2 – July 5, 2019.
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.
Action Required: Submit competitive and/or non-competitive bids electronically via the RBI's e-Kuber system by the specified deadlines on July 5, 2019.
Eligible Individuals and Institutions under the Scheme for Non-competitive Bidding Facility:
Impact: They can avail of the Non-competitive Bidding Facility in the Auctions of Government Securities, where up to 5% of the notified amount is reserved for them.
Action Required: Submit firm orders to their bank or PD, who will then submit a single consolidated non-competitive bid on their behalf.
Successful Bidders:
Impact: They will be allotted Government Stocks based on their bids.
Action Required: Make payment for the allotted securities by July 8, 2019.
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.
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: The location where the Reserve Bank of India will conduct the auctions.
RBI/2019-20/09
Ref.No.IDMD/10/08.02.032/2019-20 July 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
`17,000 crore as per the following details:
Notified
Sr Settlement
Security Amount GoI Notification Auction Date
No date
(in ` crore)
1 7.32% GS 2024 5,000
2 7.26% GS 2029 6,000 F.No.4(6) July 5, 2019 July 8, 2019
3 7.69% GS 2043 2,000 W&M/2019 dated (Friday) (Monday)
July 1, 2019
4 7.72% GS 2049 4,000
Total 17,000
Subject to the limit of `17000 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 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(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 July 5, 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 July 5, 2019 (Friday) and payment by
successful bidders will be on July 8, 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; Jun 17, 2043;
Jun 15, 2049 respectively.
(x) The Stocks will qualify for Repurchase transactions (Repo) in accordance with the Repurchase
transactions (Repo) Directions, 2018 as amended from time to time.
(xi) The Stocks will be eligible for “When Issued” trading during the period July 2 – July 5, 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
(Latha Vishwanath)
General Manager