Executive Summary:
The Reserve Bank of India (RBI) announces the auction of five Government of India dated securities for a notified amount of ₹12,000 crore. The auction will be price-based using a multiple price method and conducted by the RBI in Mumbai. Both competitive and non-competitive bids must be submitted electronically via the RBI's e-Kuber system on January 4, 2019.
Key Points / Main Content:
Auction Details:
* Government of India is selling/reissuing five dated securities for ₹12,000 crore.
* GoI has the option to retain additional subscription up to ₹1000 crore against any of the securities.
* The auction is price-based using the multiple price method.
* RBI Mumbai will conduct the auctions.
Bidding Process:
* Minimum bid amount is ₹10,000 (nominal) and in multiples thereof.
* 5% of the notified amount is reserved for non-competitive bidding by eligible individuals and institutions.
* Banks/PDs must submit a consolidated non-competitive bid on behalf of their constituents via e-Kuber.
* Both competitive and non-competitive bids must be submitted electronically on e-Kuber on January 4, 2019.
* Non-competitive bids: 11:30 a.m. - 12:00 noon; Competitive bids: 11:30 a.m. - 12:30 p.m.
* Physical bids are accepted only in the event of system failure.
* An investor can submit multiple competitive bids, but the aggregate amount cannot exceed the notified amount.
* RBI will determine the minimum price for accepted bids and can reject any bids.
Post-Auction:
* Auction results will be announced on January 4, 2019 (Friday).
* Payment by successful bidders is due on January 7, 2019 (Monday).
* Government Stocks will be issued via SGL account credit or Stock Certificate.
* Interest will be paid half-yearly.
* Stocks mature on Apr 09, 2020; Feb 15, 2027; Dec 7, 2031; Sep 09, 2035; and Oct 26, 2055 respectively.
* The Stocks will qualify for the ready forward facility.
* Stocks are eligible for When Issued trading between January 1-4, 2019, as per RBI guidelines.
Impact Analysis:
Scheduled Commercial Banks, State Cooperative Banks, Scheduled Primary Urban Cooperative Banks, Financial Institutions, and Primary Dealers
Impact: Can participate in the auction of Government of India dated securities. Must adhere to the specified bidding procedures and timelines.
Action Required: Submit competitive and/or non-competitive bids electronically via the RBI's e-Kuber system by the specified deadlines on January 4, 2019.
Eligible Individuals and Institutions:
Impact: Can participate in the auction through the Non-competitive Bidding Facility
Action Required: Submit firm orders to their bank or PD, who will then submit a single consolidated non-competitive bid on their behalf.
Investors:
Impact: Can invest in Government Stocks
Action Required: Submit bids through the Reserve Bank of India Core Banking Solution EKuber system.
Key Entities Referenced
All Scheduled Commercial Banks: Refers to all commercial banks that are included in the Second Schedule to the Reserve Bank of India Act, 1934
All State Cooperative Banks: Refers to all cooperative banks at the state level.
All Scheduled Primary Urban Cooperative Banks: Refers to primary urban cooperative banks that are included in the Second Schedule to the Reserve Bank of India Act, 1934.
All Financial Institutions: Refers to all financial institutions regulated by RBI
All Primary Dealers: Refers to all primary dealers authorized to deal in government securities.
Government of India Dated Securities: Refers to fixed-income instruments issued by the Government of India.
Reserve Bank of India: The central bank of India responsible for conducting the auctions.
Mumbai, Maharashtra: City in India where the Reserve Bank of India will conduct the auctions
RBI/2018-19/99
Ref.No.IDMD/1669/08.02.032/2018-19 December 31, 2018
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) five dated securities for a notified amount of
`12,000 crore as per the following details:
Notified
Sr GoI Auction Settlement
Security Amount
No Notification Date date
(in ` crore)
1 6.65% GS 2020 2,000
F.No.4(6)
2 8.24% GS 2027 2,000
W&M/2018 January 4, January 7,
3 GoI FRB 2031 3,000 dated 2019 2019
December 31, (Friday) (Monday)
4 7.40% GS 2035 2,000
2018
5 7.72% GS 2055 3,000
Total 12,000
Subject to the limit of `12000 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 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(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 January 4,
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 January 4, 2019 (Friday) and payment by
successful bidders will be on January 7, 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 Apr 09, 2020; Feb 15, 2027; Dec 7, 2031;
Sep 09, 2035; and Oct 26, 2055 respectively.
(x) The Stocks will qualify for the ready forward facility.
(xi) The Stocks will be eligible for “When Issued” trading during the period January 1 - January
4, 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