**Policy Summary: Repurchase of Government Stocks for Cash Management**
This notification, issued by the Department of Economic Affairs, Ministry of Finance, Government of India on February 2, 2016, announces the repurchase of three government stocks: 7.59 per cent Government Stock 2016, 10.71 per cent Government Stock 2016, and 7.02 per cent Government Stock 2016. This repurchase is being undertaken for cash management operations, utilizing surplus cash balances to prematurely redeem these stocks.
The repurchase will be conducted through reverse auctions in one or more tranches, with the Reserve Bank of India (RBI) responsible for notifying the specific procedures and settlement dates. The aggregate nominal amount of the repurchase across all three government stocks is ₹20,000 crore.
Payment for the repurchased stocks, including accrued interest on accepted bids, will be made from the Government of India's cash balances maintained with the CAS, RBI, Nagpur. Upon repurchase, the government stocks will be prematurely redeemed, and interest accrual will cease.
The Government Securities Act, 2006, the Government Securities Regulations, 2007, and any earlier corresponding notifications issued by the Government of India will govern any matters not explicitly addressed in this notification.
Prashant Goyal, Joint Secretary to the Government of India, issued this notification by order of the President of India. The notification reference number is F. No 45WM2015.
Key Entities Referenced
Ministry of Finance: The ministry responsible for the financial matters of the Government of India.
Department of Economic Affairs: A department within the Ministry of Finance.
Budget Division: A division within the Department of Economic Affairs.
7.59 per cent Government Stock 2016: A specific government stock being repurchased.
10.71 per cent Government Stock 2016: A specific government stock being repurchased.
7.02 per cent Government Stock 2016: A specific government stock being repurchased.
Reserve Bank of India: The central bank of India, responsible for notifying the repurchase settlement details.
Nagpur, Maharashtra: Location of the CAS (Central Accounts Section) of the RBI (Reserve Bank of India) where the Government of India maintains its cash balances.
Government of India
Ministry of Finance
Department of Economic Affairs
Budget Division
New Delhi, dated February 02, 2016
NOTIFICATION
Repurchase of Government Stocks
F. No 4(5)-W&M/2015: The Government of India hereby notifies repurchase of (i) 7.59 per
cent Government Stock 2016, (ii) 10.71 per cent Government Stock 2016, and (iii) 7.02 per
cent Government Stock 2016 (herein after called the Government Stocks) for its cash
management operations. The repurchase by the Government of India will be undertaken to
prematurely redeem the Government stocks by utilising the current surplus cash balances.
Mode of Repurchase
2. The repurchase of the Government Stocks will be undertaken through reverse auction by
the Government of India in one or more tranches. The actual procedure to be followed in this
regard and the date of repurchase/settlement will be notified by the Reserve Bank of India.
Nominal Amount of Repurchase
3. The repurchase of “7.59 per cent Government Stock 2016”, “10.71 per cent Government
Stock 2016”, and “7.02 per cent Government Stock 2016” will be for an aggregate amount of
Rs 20,000 crore.
Payment
4. The payment for the repurchase of the Government Stocks will be made by the
Government of India from its cash balances maintained with the CAS, RBI, Nagpur. Such
payment will include the accrued interest on the nominal value of the successful bids/offer
accepted by the Reserve Bank of India. The Government stocks repurchased in this manner
will get prematurely redeemed and interest will cease to accrue on such redeemed
Government stocks.
Statutory Provision
5. With respect to any such matter which has not been provided under this Notification, the
Government Stock shall be governed by the Government Securities Act, 2006 and the
Government Securities Regulations, 2007 framed thereunder and the earlier corresponding
Notification(s) issued by the Government of India.
By Order of the President of India
(Prashant Goyal)
Joint Secretary to the Government of India