Home › Circulars › RBI/2007-08/202

Revised Underwriting Commitment for Primary Dealers

Current · Source: Reserve Bank of India · RBI/2007-08/202 · issued 30 Nov 2007 · ~2 min read
Quick answerRBI revised the minimum bidding requirement in Additional Competitive Underwriting auctions for Primary Dealers, replacing the 3% of notified amount with an amount equal to each PD's Minimum Underwriting Commitment, as per circular dated November 30, 2007.
The rule, in the simplest words
How it plays out — a real example

A treasury officer in Indore, who also handles government securities for her bank, used to calculate her bank's bid in ACU auctions as 3% of the notified amount. Now, she simply looks up her bank's Minimum Underwriting Commitment (MUC) and bids that exact amount, saving time and reducing the capital her bank needs to reserve for the auction.

What changed

The minimum bidding commitment for each Primary Dealer in the Additional Competitive Underwriting (ACU) auction was changed from 3% of the notified amount to an amount equal to the dealer's Minimum Underwriting Commitment (MUC). An illustrative example in the annex shows that for a notified amount of Rs. 5,000 crore with 19 PDs, the per-PD ACU bidding requirement dropped from Rs. 150 crore to Rs. 132 crore, aligning it with the MUC.

What it means for you

This change reduces the total underwriting commitment for each PD from Rs. 282 crore to Rs. 264 crore in the example, lowering the capital required for bidding. It simplifies the calculation by making the ACU bid requirement identical to the MUC, potentially easing liquidity pressure on PDs and banks undertaking PD business departmentally.

What you must do

Who it affects

All Primary Dealers in the Government Securities Market, Scheduled Commercial Banks undertaking PD business departmentally

❓ Common questions

What exactly changed in the ACU bidding requirement?

Previously, each PD had to bid at least 3% of the notified amount in the Additional Competitive Underwriting auction. Now, the minimum bid is equal to the PD's Minimum Underwriting Commitment (MUC), which is the notified amount divided by twice the number of PDs, rounded up.

Does this change affect the total underwriting commitment for all PDs?

Yes, the total underwriting commitment for all PDs collectively decreases. In the example with a Rs. 5,000 crore notified amount and 19 PDs, the total dropped from Rs. 5,358 crore to Rs. 5,016 crore.

Are any other terms of the underwriting scheme modified?

No, all other terms and conditions of the underwriting scheme remain unchanged as per the circular.

📜 Read the original circular — full text as issued by RBI
Notifications - Reserve Bank of India Skip to main content Selected Selected Change Language हिंदी Search the Website Search Home About Us ▼ About Us Organisation & Functions ▶ Organisation Structure Departments Offices Training Establishment ▶ College of Agricultural Banking Reserve Bank Staff College College of Supervisors RBI's Functions and Working Governors Deputy Governors Executive Directors Communication Policy of RBI Sources of Information ▶ Annual Publications Half-yearly Publications Quarterly Publications Monthly Publications Weekly Publications Occasional Publications SDDS NSDP Data Releases Publications available on Subscription General Information RBI History Museum ▶ The RBI Museum RBI Monetary Museum Notification ▼ Notifications Master Directions Master Circulars Amendment Directions Draft Notifications/Guidelines ▶ Draft Notifications/Guidelines Draft Directions (RE-wise) Index To RBI Circulars Standalone Circulars Circulars Withdrawn Press Releases Speeches & Media Interactions ▼ Speeches Media Interactions Memorial Lectures Podcasts Publications ▼ Biennial Annual Half-Yearly Quarterly Bi-monthly Monthly Weekly Occasional Reports Working Papers Legal Framework ▼ Act Rules Regulations Schemes Research ▼ External Research Schemes RBI Occasional Papers Working Papers RBI Bulletin History DRG Studies KLEMS State Statistics and Finances Statistics ▼ Data Releases Database on Indian Economy Public Debt Statistics Regulatory Reporting ▼ List of Returns Data Definition Validation rules/ Taxonomy List of RBI Reporting Portals FAQs of RBI Reporting Portals Home Notifications Notifications ( 9 kb ) Revised Scheme of Underwriting Commitment and Liquidity Support RBI/2007-08/202 IDMD.PDRS.No.2720/03.64.00/2007-08 November 30, 2007 All Primary Dealers in the Government Securities Market and Scheduled Commercial Banks undertaking PD business departmentally Revised Scheme of Underwriting Commitment and Liquidity Support Please refer to our circular RBI/2007-08/186/IDMD.PDRS.No. 2382/03.64.00/2007-08 dated November 14, 2007 on the captioned subject. 2. We have since received a few queries about the change in the minimum bidding requirement in the Additional Competitive Underwriting auction. The bidding requirement as per the revised circular has been further amplified in the Annex for the benefit of market participants. 3. All other terms and conditions of the underwriting scheme remain unchanged. Yours faithfully (R.N. Kar) General Manager   ANNEX (Annex to RBI Circular No: RBI/2007-08/202 IDMD.PDRS.No.2720/03.64.00/2007-08 dated November 30, 2007)   Illustration of the change in minimum bidding commitment of Primary Dealers in the Additional Competitive Underwriting auction Sr. No. Underwriting components Basis of computation Present Method Revised Method   (Amount in Rs. crore)         Notified Amount   5000 5000 1 No. of PDs   19 19 2 Minimum Underwriting Commitment (MUC) for all PDs collectively (Notified Amount / 2) 2500 2500 3 Each PD's share under MUC (Sr.No.2 / Sr. No.1) 131.58 131.58 4 Rounded off to next higher integer   132 132 5 Total PD commitment under MUC collectively (Sr. No. 4 x Sr. No. 1) 2508 2508 6 Balance under ACU (Total notified amount minus MUC) 2492 2492 7 Minimum bidding commitment for each PD under ACU 3 per cent of notified amount under present method and an amount equal to MUC under revised method 150 132 8 Total commitment under ACU for all PDs collectively (Sr. No. 7 x Sr. No.1) 2850 2508 9 Total underwriting commitment for each PD under MUC and ACU (Sr. No. 4 + Sr. No. 7) 282 264 10 Total Underwriting (Sr. No. 9 x Sr. No. 1) 5358 5016 2026 All Months January February March April May June July August September October November December 2025 All Months January February March April May June July August September October November December 2024 All Months January February March April May June July August September October November December 2023 All Months January February March April May June July August September October November December 2022 All Months January February March April May June July August September October November December 2021 All Months January February March April May June July August September October November December 2020 All Months January February March April May June July August September October November December 2019 All Months January February March April May June July August September October November December 2018 All Months January February March April May June July August September October November December 2017 All Months January February March April May June July August September October November December Archives 2016 All Months January February March April May June July August September October November December 2015 All Months January February March April May June July August September October November December 2014 All Months January February March April May June July August September October November December 2013 All Months January February March April May June July August September October November December 2012 All Months January February March April May June July August September October November December 2011 All Months January February March April May June July August September October November December 2010 All Months January February March April May June July August September October November December 2009 All Months January February March April May June July August September October November December 2008 All Months January February March April May June July August September October November December 2007 All Months January February March April May June July August September October November December 2006 All Months January February March April May June July August September October November December 2005 All Months January February March April May June July August September October November December 2004 All Months January February March April May June July August September October November December 2003 All Months January February March April May June July August September October November December 2002 All Months January February March April May June July August September October November December 2001 All Months January February March April May June July August September October November December 2000 All Months January February March April May June July August September October November December 1999 All Months January February March April May June July August September October November December 1998 All Months January February March April May June July August September October November December 1997 All Months January February March April May June July August September October November December 1996 All Months January February March April May June July August September October November December 1995 All Months January February March April May June July August September October November December 1994 All Months January February March April May June July August September October November December 1993 All Months January February March April May June July August September October November December 1992 All Months January February March April May June July August September October November December 1991 All Months January February March April May June July August September October November December Top Back to previous page More Links : Bank Holidays Banking Glossary Citizen's Charter Complaints Contact Us COVID-19 Measures E-LMS Events FAQs Financial Education Forms IFSC/MICR Codes Important Websites Opportunities @ RBI RBI Clarifications RBI Kehta Hai RBI’s Vision and Values (1257 kb)--> Right to Information Act Tenders Follow RBI RSS Twitter YouTube Instagram Facebook LinkedIn © Reserve Bank of India. All Rights Reserved. Sitemap | Disclaimer Website owned and managed by Reserve Bank of India. Contact us on helpdoc[at]rbi[dot]org[dot]in Website last updated date: Jul 27, 2026 Supports: Google Chrome 147+ | Firefox 150+ | Microsoft Edge Version 147+ | Safari 17+ Accessibility Statement | Screen Reader and Accessibility Help
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2007-08/202 · issued 30 Nov 2007. The plain-English explanation above is BankPulse’s own independent summary.
🧰 Tools — save, print, templates & related
Most relevant forTreasury Team / ALMRisk ManagementCompliance TeamSenior Management / BoardInternal AuditCorporate / Wholesale Banking RM
🛠 Banker’s toolkit — checklists & reply templates →
Related circulars · Internal Debt Management
RBI Auction of State Government SecuritiesRBI Buyback of Government Securities: ₹20,000 Crore AuctionRBI Buyback Auction Results for Government SecuritiesRBI Buyback Auction Results for Government SecuritiesState Govt Securities Auction Results – July 28, 2026
Browse all departments →
Who does what — compliance checklist
💰 Credit
  • Update internal underwriting bid calculation models to use MUC instead of 3% of notified amount for ACU auctions.
  • Review capital allocation for underwriting commitments to reflect the reduced total exposure per auction.
  • Ensure compliance with all other unchanged terms of the underwriting scheme as per the November 14, 2007 circular.
📜 Compliance
  • Communicate the revised bidding requirement to treasury and risk management teams handling government securities auctions.
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 (All Primary Dealers in the Government Securities Market, Scheduled Commercial Banks undertaking PD business departmentally), your first concrete step on “Revised Underwriting Commitment for Primary Dealers” is: “Update internal underwriting bid calculation models to use MUC instead of 3% of notified amount for ACU auctions.” (RBI issued this 30 Nov 2007).

  1. Circular: RBI/2007-08/202 -- Revised Underwriting Commitment for Primary Dealers
  2. Issued: 30 Nov 2007
  3. Action required: Update internal underwriting bid calculation models to use MUC instead of 3% of notified amount for ACU auctions.
  4. Action required: Communicate the revised bidding requirement to treasury and risk management teams handling government securities auctions.
  5. Action required: Review capital allocation for underwriting commitments to reflect the reduced total exposure per auction.
  6. Action required: Ensure compliance with all other unchanged terms of the underwriting scheme as per the November 14, 2007 circular.
  7. Owner: ____________ Target date: ____________
  8. Board/committee approval needed? Y / N
  9. 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.

Loading comments…
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=3963&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.
Public beta — plain-English informational summaries. Always verify against the official RBI source (circular number cited on every page) before making compliance, credit, treasury, audit, or operational decisions. · Join our WhatsApp channel ↗
—