Executive Summary:
The Reserve Bank of India (RBI) announces the auction of five Government of India dated securities for a notified amount of ₹17,000 crore. The auction will be conducted by the RBI in Mumbai. Competitive and non-competitive bids must be submitted electronically via the RBI Core Banking Solution (e-Kuber) on April 5, 2019, with settlement on April 8, 2019.
Key Points / Main Content:
Auction Details:
* Five Government of India dated securities will be auctioned.
* The total notified amount is ₹17,000 crore, with an option for GoI to retain additional subscriptions up to ₹1,000 crore against one or more securities.
* The auction is yield-based for new securities and price-based for other securities, using a multiple price method.
* RBI Mumbai will conduct the auctions.
Bidding Process:
* Stocks will be issued for a minimum amount of ₹10,000 nominal and in multiples of ₹10,000 thereafter.
* Up to 5% of the notified amount will be allotted to eligible individuals and institutions under the Non-Competitive Bidding Facility.
* Both competitive and non-competitive bids must be submitted electronically via e-Kuber on April 5, 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.
* An investor can submit multiple competitive bids, but the aggregate amount should not exceed the notified auction amount.
* RBI has the discretion to accept or reject any or all bids.
* Auction results will be announced on April 5, 2019.
Issue and Repayment:
* Payment by successful bidders is due on April 8, 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: Jan 21, 2021; Apr 8, 2026; Dec 7, 2031; Sep 15, 2039; Oct 26, 2055.
* Stocks qualify for the ready forward facility.
* Stocks are eligible for "When Issued" trading between April 2 - April 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. The auction provides an opportunity for them to invest in government securities and manage their portfolios.
* Action Required: Submit competitive and/or non-competitive bids electronically via the RBI's e-Kuber system by the specified deadlines on April 5, 2019. Banks/PDs must submit a single consolidated non-competitive bid on behalf of their constituents based on firm orders received.
Investors (Individuals and Institutions):
* Impact: Eligible individuals and institutions can invest in Government Securities through the non-competitive bidding facility.
* Action Required: Submit firm orders to their bank or Primary Dealer for non-competitive bids. If eligible, submit competitive bids directly.
Reserve Bank of India (RBI):
* Impact: The RBI is responsible for conducting the auction and determining the minimum price for accepted bids.
* Action Required: Conduct the auction, process bids, determine the minimum price, and announce the results on April 5, 2019.
Key Entities Referenced
Government of India: Issuer of dated securities being auctioned.
Reserve Bank of India: The central bank of India, responsible for conducting the auctions.
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.
Government Securities: Securities being auctioned by the Government of India.
RBI/2018-19/159
Ref.No.IDMD/2744/08.02.032/2018-19 April 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 (issue/re-issue) five dated securities for a notified amount
of `17,000 crore as per the following details:
Notified
Sr Auction Settlement
Security Amount GoI Notification
No Date date
(in ` crore)
1 7.00% GS 2021 3,000
2 New GS 2026 3,000 F.No.4(6)
W&M/2018 April 5, 2019 April 8, 2019
3 FRB 2031 5,000
dated (Friday) (Monday)
4 New GS 2039 2,000
April 1, 2019
5 7.72% GS 2055 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 be yield based (for new securities) and price based (for other securities), using
multiple price method for both. 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 April 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 April 5, 2019 (Friday) and payment by
successful bidders will be on April 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 21, 2021; Apr 8, 2026; Dec 7, 2031; Sep
15, 2039; 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 April 2 – April 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
(Shyni Sunil)
Deputy General Manager