Executive Summary:
The Reserve Bank of India (RBI) announces the auction of four Government of India dated securities for a notified amount of ₹16,000 crore. The auction, conducted by the RBI in Mumbai, is price-based using a multiple price method. Bids must be submitted electronically on the RBI's e-Kuber system by December 13, 2019, and payment by successful bidders is due on December 16, 2019.
Key Points / Main Content:
* **Auction Details:**
* Four Government of India dated securities will be reissued.
* The total notified amount is ₹16,000 crore.
* GoI has the option to retain additional subscriptions up to ₹1,000 crore against any one or more securities.
* The auction will be price-based using the multiple price method.
* **Bidding Process:**
* The minimum investment amount is ₹10,000 nominal and in multiples of ₹10,000.
* Up to 5% of the notified amount will be allotted to eligible individuals and institutions under the Non-Competitive Bidding Facility.
* Competitive and non-competitive bids must be submitted electronically on the RBI's e-Kuber system on December 13, 2019.
* Non-competitive bids: 11:30 a.m. to 12:00 noon.
* Competitive bids: 11:30 a.m. to 12:30 p.m.
* Physical bids are accepted only in the event of system failure.
* The aggregate amount of bids submitted by a person should not exceed the notified amount.
* RBI has the discretion to accept or reject any or all bids.
* **Settlement and Issuance:**
* Auction results will be announced on December 13, 2019.
* Payment by successful bidders is due on December 16, 2019.
* Government Stocks will be issued via Subsidiary General Ledger (SGL) account or Stock Certificate.
* Interest will be paid half-yearly.
* Stocks will be repaid at par on their respective maturity dates.
* **Other Important Points:**
* The Stocks qualify for Repurchase (Repo) transactions.
* The Stocks are eligible for When Issued trading between December 10-13, 2019.
Impact Analysis:
Scheduled Commercial Banks
* Impact: Banks can participate in the auction to acquire government securities.
* Action Required: Submit competitive and/or non-competitive bids through the e-Kuber system by the specified deadlines.
State Cooperative Banks
* Impact: Banks can participate in the auction to acquire government securities.
* Action Required: Submit competitive and/or non-competitive bids through the e-Kuber system by the specified deadlines.
Scheduled Primary Urban Cooperative Banks
* Impact: Banks can participate in the auction to acquire government securities.
* Action Required: Submit competitive and/or non-competitive bids through the e-Kuber system by the specified deadlines.
Financial Institutions
* Impact: Institutions can participate in the auction to acquire government securities.
* Action Required: Submit competitive and/or non-competitive bids through the e-Kuber system by the specified deadlines.
Primary Dealers
* Impact: Dealers can participate in the auction to acquire government securities and facilitate non-competitive bidding for their constituents.
* Action Required: Submit competitive and non-competitive bids (including consolidated non-competitive bids for constituents) through the e-Kuber system by the specified deadlines.
Investors (Individuals and Institutions)
* Impact: Eligible investors can participate in the auction through the non-competitive bidding facility via banks or primary dealers.
* Action Required: Place firm orders with banks or primary dealers to participate in the non-competitive bidding process.
RBI
* Impact: Oversees and manages the auction process.
* Action Required: Conduct the auction, determine the minimum price, announce results, and issue the government stocks.
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 notification is addressed.
All State Cooperative Banks: One of the entities to whom the notification is addressed.
All Scheduled Primary Urban Cooperative Banks: One of the entities to whom the notification is addressed.
All Financial Institutions: One of the entities to whom the notification is addressed.
All Primary Dealers: One of the entities to whom the notification is addressed.
Mumbai, Maharashtra: Location where the Reserve Bank of India will conduct the auctions.
RBI/2019-20/112
Ref.No.IDMD/1579/08.02.032/2019-20 December 09, 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
₹16,000 crore as per the following details:
Notified
Sr Auction Settlement
Security Amount GoI Notification
No Date date
(in ₹ crore)
1 6.18% GS 2024 4,000
F.No.4(6) December December
2 7.57% GS 2033 6,000
W&M/2019 dated 13, 2019 16, 2019
3 7.69% GS 2043 2,000
December 09, 2019 (Friday) (Monday)
4 7.72% GS 2049 4,000
Total 16,000
Subject to the limit of ₹16,000 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 December 13,
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 December 13, 2019 (Friday) and payment by
successful bidders will be on December 16, 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 Nov 04, 2024; Jun 17, 2033; 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 December 10 –
December 13, 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