Executive Summary:
The Reserve Bank of India (RBI) announced the auction of four Government of India dated securities for a total notified amount of ₹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 October 6, 2017, and payment by successful bidders is due on October 9, 2017.
Key Points / Main Content:
Auction Details:
* Four Government of India dated securities will be reissued.
* The total notified amount is ₹15,000 crore.
* GoI has the option to retain additional subscription up to ₹1,000 crore against any security.
* The auction is price-based using a multiple price method.
* The Reserve Bank of India at Mumbai will conduct the auctions.
Bidding Process:
* The minimum amount for Stocks 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.
* Banks/PDs must submit a single consolidated non-competitive bid on behalf of their constituents electronically.
* Both competitive and non-competitive bids must be submitted electronically via the RBI e-Kuber system.
* Non-competitive bids are due between 10:30 a.m. and 11:30 a.m.; competitive bids between 10:30 a.m. and 12:00 noon on October 6, 2017.
* The aggregate amount of bids submitted by a person in an auction should not exceed the notified amount of auction.
* RBI determines the minimum price, and bids below that will be rejected.
* RBI has the discretion to accept or reject any/all bids.
Settlement and Terms:
* Auction results will be announced on October 6, 2017.
* Payment by successful bidders is due on October 9, 2017.
* Government Stocks will be issued via SGL account credit or Stock Certificate.
* Interest will be paid half-yearly.
* Stocks will be repaid at par on specified maturity dates: December 19, 2022; September 17, 2031; December 5, 2033; and November 28, 2051.
* The Stocks qualify for the ready forward facility.
* The Stocks are eligible for When Issued trading during the period October 3 – October 6, 2017.
Impact Analysis:
Scheduled Commercial Banks:
* Impact: Can participate in the auction and submit bids on behalf of themselves and their constituents.
* Action Required: Submit competitive and non-competitive bids electronically via e-Kuber by the specified deadlines.
State Cooperative Banks:
* Impact: Can participate in the auction and submit bids on behalf of themselves and their constituents.
* Action Required: Submit competitive and non-competitive bids electronically via e-Kuber by the specified deadlines.
Scheduled Primary Urban Cooperative Banks:
* Impact: Can participate in the auction and submit bids on behalf of themselves and their constituents.
* Action Required: Submit competitive and non-competitive bids electronically via e-Kuber by the specified deadlines.
Financial Institutions:
* Impact: Can participate in the auction and submit bids on behalf of themselves and their constituents.
* Action Required: Submit competitive and non-competitive bids electronically via e-Kuber by the specified deadlines.
Primary Dealers:
* Impact: Can participate in the auction and submit bids on behalf of themselves and their constituents.
* Action Required: Submit competitive and non-competitive bids electronically via e-Kuber by the specified deadlines. Must submit a single consolidated non-competitive bid on behalf of all its constituents.
Investors (Individuals and Institutions):
* Impact: Eligible individuals and institutions can participate in the auction through the Non-Competitive Bidding Facility.
* Action Required: Submit firm orders to their bank or PD for non-competitive bidding.
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: Entities eligible to participate in the auction.
All State Cooperative Banks: Entities eligible to participate in the auction.
All Scheduled Primary Urban Cooperative Banks: Entities eligible to participate in the auction.
All Financial Institutions: Entities eligible to participate in the auction.
All Primary Dealers: Entities eligible to participate in the auction.
Mumbai, Maharashtra: Location where the Reserve Bank of India will conduct the auctions.
RBI/2017-18/69
Ref.No.IDMD/853/08.02.032/2017-18 September 29, 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:
Notified
Sr Auction Settlement
Security Amount GoI Notification
No Date date
(in ` crore)
1 6.84% GS 2022 3,000
F.No.4(7) W&M/2017
2 6.68% GS 2031 8,000 October 6, October 9,
dated 2017 2017
3 6.57% GS 2033 2,000 September 29, 2017 (Friday) (Monday)
4 6.62% GS 2051 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 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 October 6,
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 October 6, 2017 (Friday) and payment by
successful bidders will be on October 9, 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 November 28, 2051 respectively.
(ix) The Stocks will qualify for the ready forward facility.
(x) The Stocks will be eligible for “When Issued” trading during the period October 3 – October
6, 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
(Shyni Sunil )
Deputy General Manager