What changed
Government of India has offered to re-issue three dated securities with notified amounts of Rs 3,000 crore, Rs 7,000 crore, and Rs 3,000 crore respectively. The auctions will be conducted by RBI on November 30, 2012, using a price-based uniform price method. Non-competitive bidding facility is available for up to 5% of the notified amount for eligible entities.
What it means for you
Banks and PDs must submit consolidated non-competitive bids on behalf of their constituents via E-Kuber system. Competitive bids are accepted between 10:30 AM and 12:00 noon, while non-competitive bids have a shorter window from 10:30 AM to 11:30 AM. Successful bidders must make payment by December 3, 2012, and stocks will be issued via SGL credit or stock certificates.
What you must do
- Submit competitive and non-competitive bids electronically on E-Kuber by the specified deadlines on November 30, 2012.
- Ensure non-competitive bids are consolidated per bank/PD and submitted between 10:30 AM and 11:30 AM.
- Advise clients that minimum bid amount is Rs 10,000 and in multiples thereof.
- Prepare for payment by December 3, 2012, for successful bids.
- Note that physical bids are not accepted except in extraordinary E-Kuber system failure.
Who it affects
All Scheduled Commercial Banks, All State Co-operative Banks, All Scheduled Primary (Urban) Co-operative Banks, All Financial Institutions, All Primary Dealers, Eligible individuals and institutions under non-competitive bidding scheme
What is the minimum bid amount for these auctions?
The minimum bid amount is Rs 10,000 (nominal) and in multiples of Rs 10,000 thereafter.
Can an investor submit multiple competitive bids?
Yes, an investor can submit more than one competitive bid at different prices, but the aggregate amount of bids should not exceed the notified amount of the auction.
When will the auction results be announced and payment due?
Results will be announced on November 30, 2012, and payment by successful bidders must be made on December 3, 2012.