Executive Summary:
The Reserve Bank of India (RBI) announces the auction of five Government of India dated securities for a total notified amount of ₹16,000 crore. The auction will be price-based and conducted by the RBI in Mumbai on November 08, 2019, with payment by successful bidders due on November 11, 2019. Both competitive and non-competitive bids must be submitted electronically via the RBI's e-Kuber system.
Key Points / Main Content:
Auction Details:
* Government of India is selling/reissuing five dated securities for ₹16,000 crore.
* The auction is price-based using a multiple price method.
* RBI Mumbai will conduct the auctions.
* GoI can retain additional subscriptions up to ₹1000 crore against any one or more securities.
Bidding Process:
* Minimum bid amount is ₹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.
* Banks/PDs must submit a single 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 November 08, 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 should not exceed the notified amount.
* RBI will determine the minimum price; bids below this will be rejected.
* RBI has the right to accept or reject any/all bids.
Issue and Settlement:
* Auction results will be announced on November 08, 2019.
* Payment by successful bidders is due on November 11, 2019.
* Stocks will be issued to SGL accounts or in the form of Stock Certificates.
* Interest will be paid half-yearly.
* Stocks will be repaid at par on their respective maturity dates (July 15, 2021; Apr 08, 2026; Oct 07, 2029; Sep 15, 2039; Jun 17, 2059).
Other Details:
* The Stocks qualify for Repo transactions.
* The Stocks are eligible for When Issued trading between November 05 - November 08, 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 securities, potentially affecting their investment portfolios and liquidity management.
Action Required: Submit competitive and/or non-competitive bids electronically via the RBI's e-Kuber system by the specified deadlines (November 08, 2019). Banks/PDs need to consolidate non-competitive bids from their constituents.
Eligible Individuals and Institutions:
Impact: These entities can participate in the auction through the Non-competitive Bidding Facility.
Action Required: Submit firm orders to their bank or Primary Dealer (PD) to participate in the non-competitive bidding.
Investors:
Impact: Investors have the opportunity to invest in government securities with varying maturities and interest rates.
Action Required: Evaluate the securities and submit competitive bids through the e-Kuber system, or submit firm orders to a bank or PD for non-competitive bidding. Ensure the aggregate amount of bids does not exceed the notified amount.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for conducting the auctions and determining the minimum price for Government Stock.
Government of India: The issuer of the dated securities being auctioned.
All Scheduled Commercial Banks: A category of financial institutions eligible to participate in the auction.
All State Cooperative Banks: A category of financial institutions eligible to participate in the auction.
All Scheduled Primary Urban Cooperative Banks: A category of financial institutions eligible to participate in the auction.
All Financial Institutions: A category of financial institutions eligible to participate in the auction.
All Primary Dealers: A category of financial institutions eligible to participate in the auction.
Mumbai, Maharashtra: The location where the auctions will be conducted by the Reserve Bank of India.
RBI/2019-20/90
Ref.No.IDMD/1184/08.02.032/2019-20 November 04, 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) five dated securities for a notified amount of
`16,000 crore as per the following details:
Notified
Sr Settlement
Security Amount GoI Notification Auction Date
No date
(in ` crore)
1 6.17% GS 2021 2,000
2 7.27% GS 2026 2,000
F.No.4(6)
November 08, November 11,
3 6.45% GS 2029 7,000 W&M/2019 dated
2019 (Friday) 2019 (Monday)
November 04, 2019
4 7.62% GS 2039 1,000
5 7.63% GS 2059 4,000
Total 16,000
Subject to the limit of `16000 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 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 November 08,
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 November 08, 2019 (Friday) and payment by
successful bidders will be on November 11, 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 July 15, 2021; Apr 08, 2026; Oct 07, 2029;
Sep 15, 2039; Jun 17, 2059 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 November 05 –
November 08, 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