Underwriting Bids Move to Electronic Mode; Commission Payment Timing Changed
Current & verified — this is the latest version
Source: Reserve Bank of India · RBI/2004-05/474 · issued 19 May 2005 · ~2 min read
Quick answerRBI mandates Primary Dealers to submit underwriting bids electronically via the PMO module instead of physical forms. Underwriting commission will now be credited on settlement date, not auction date. PDs not bidding must avoid submitting 'Nil' bids.
The rule, in the simplest words
Submit underwriting bids electronically via the PMO module instead of physical forms.
Underwriting commission will be credited on settlement date, not auction date.
Do not submit 'Nil' bids if not bidding; simply do not submit any bid in the system.
How it plays out — a real example
A treasury officer in Indore, Mr. Kumar, ensures that all underwriting bids are submitted electronically via the PMO module, avoiding manual paperwork and potential errors. He also updates the internal cash flow projections to reflect the change in commission payment timing, ensuring that the bank's cash flow planning is accurate and efficient.
What changed
Primary Dealers must now submit underwriting bids for dated government securities electronically through the PMO module of PDO-NDS, replacing the earlier physical submission process. The underwriting commission, previously credited on auction date, will now be credited on the settlement date of the auction payment.
What it means for you
This shift to electronic bidding streamlines the underwriting process and reduces manual paperwork for PDs. The change in commission payment timing may impact cash flow planning, as PDs will receive funds later than before. PDs must ensure they do not submit 'Nil' bids since the system rejects zero amount entries.
What you must do
Ensure your systems are configured to submit underwriting bids electronically via the PMO module for all dated government securities auctions.
Update internal cash flow projections to reflect that underwriting commission will be credited on settlement date, not auction date.
Train staff to avoid submitting 'Nil' bids; if not bidding, simply do not submit any bid in the system.
Verify that your PDO-NDS access and credentials are active for the PMO module.
Who it affects
Primary Dealers in Government Securities Market, Treasury and operations teams handling government securities auctions, Back-office staff managing settlement and commission receipts
❓ Common questions
What happens if we accidentally submit a 'Nil' bid?
The system prohibits '0' amount entries, so a 'Nil' bid cannot be submitted. If you do not wish to bid, simply do not submit any bid in the PMO module.
When will we receive the underwriting commission now?
The commission will be credited to your current account on the settlement date of the auction payment, not on the auction date as before.
Does this apply to all government securities auctions?
Yes, this applies to dated government securities auctions conducted under the PMO module of PDO-NDS.
📜 Read the original circular — full text as issued by RBI
RBI/2004-05/474
IDMD.PDRS.No. 4907/03.64.00/2004-05
May 19, 2005
All Primary Dealers in Government Securities Market
Dear Sirs
Conduct of Dated Government Securities Auction
under Primary Market Operations (PMO) module of PDO-NDS – Payment of Underwriting
Commission
The procedure for underwriting of primary issues
of the Dated Government Securities by the Primary Dealers (PDs) has been laid
down in paragraph 2.1 of our Master
Circular IDMD.PDRS.05/03.64.00/2004-2005 dated October 1, 2004 . In view
of the operationalisation of PMO module in PDO-NDS, it is advised that PDs instead
of submitting underwriting bids in physical form, should electronically bid
for underwriting in the PMO module, for which provision has been made. As the
system prohibits ‘0’ amount entry, PDs which do not choose to bid for underwriting
should not submit ‘Nil’ bids.
2. Further, it may be noted that the underwriting
commission hitherto credited to the current account of the PDs on the date of
the relative auction, will now be credited on the date of settlement of auction
payment.
3. Kindly acknowledge receipt.
Yours faithfully
(B. Mahapatra)
Chief General Manager-in-Charge
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2004-05/474 · issued 19 May 2005. The plain-English explanation above is BankPulse’s own independent summary.
Update internal cash flow projections to reflect that underwriting commission will be credited on settlement date, not auction date.
💰 Credit
Ensure your systems are configured to submit underwriting bids electronically via the PMO module for all dated government securities auctions.
💻 IT / Systems
Train staff to avoid submitting 'Nil' bids; if not bidding, simply do not submit any bid in the system.
📜 Compliance
Verify that your PDO-NDS access and credentials are active for the PMO module.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are a Credit Manager at a bank this circular applies to (Primary Dealers in Government Securities Market, Treasury and operations teams handling government securities auctions, Back-office staff managing settlement and commission receipts), your first concrete step on “Underwriting Bids Move to Electronic Mode; Commission Payment Timing Changed” is: “Ensure your systems are configured to submit underwriting bids electronically via the PMO module for all dated government securities auctions.” (RBI issued this 19 May 2005).
Action required: Ensure your systems are configured to submit underwriting bids electronically via the PMO module for all dated government securities auctions.
Action required: Update internal cash flow projections to reflect that underwriting commission will be credited on settlement date, not auction date.
Action required: Train staff to avoid submitting 'Nil' bids; if not bidding, simply do not submit any bid in the system.
Action required: Verify that your PDO-NDS access and credentials are active for the PMO module.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=2267&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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