Home › Circulars › RBI/2007-2008/186

Revised Minimum Bidding for PDs in ACU Auctions

Current · Source: Reserve Bank of India · RBI/2007-2008/186 · issued 14 Nov 2007 · ~1 min read
Quick answerRBI has revised the minimum bidding requirement for Primary Dealers in Additional Competitive Underwriting auctions from 3% of notified amount to an amount equal to each PD's Minimum Underwriting Commitment, effective henceforth.
The rule, in the simplest words
How it plays out — a real example

Ravi, a gold‑loan officer in Indore, reads the RBI circular and sees that his firm’s minimum bid in the ACU auction should now match its MUC. He quickly updates the internal bidding guidelines, lowers his daily bid limit from 150 crore to 132 crore, and shares the change with his dealing room and compliance team, feeling confident that the new rule simplifies his work.

What changed

Previously, each PD had to bid for at least 3% of the notified amount in the ACU auction. Now, the minimum bid in the ACU auction is set equal to the PD's MUC, which is a fixed rupee amount based on the total MUC divided equally among PDs.

What it means for you

This change aligns the ACU minimum bid with the MUC, reducing the total underwriting commitment for all PDs from 5358 crore to 5016 crore in the illustration. It simplifies bidding requirements and may lower the aggregate risk for PDs, as the minimum bid per PD decreases from 150 crore to 132 crore in the example.

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 is the new minimum bid amount for a PD in the ACU auction?

The minimum bid is now equal to the PD's Minimum Underwriting Commitment (MUC), not 3% of the notified amount as before.

Does this change affect underwriting commission or other terms?

No, the basis for payment of underwriting commission and other terms remain unchanged.

📜 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 ( 95 kb ) Revised Scheme of Underwriting Commitment and Liquidity Support RBI/2007-2008/186 IDMD.PDRS.No. 2382/03.64.00/2007-08 November 14, 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 IDMC.No.3007/03.64.00/2005-06 dated April 4, 2006 on the Scheme for Underwriting Commitment. 2. In terms of the aforesaid Scheme, the Reserve Bank of India announces the Minimum Underwriting Commitment (MUC) for each PD and the amount for which Additional Competitive Underwriting (ACU) auction will be held. Each PD is required to bid for a minimum of three percent of the notified amount in the ACU auction. 3. The Scheme has been reviewed and it has been decided that the minimum bidding requirement for each PD in the ACU auction would henceforth be equal to the amount of MUC. An illustration of the revised minimum commitment for PDs in the ACU auction is enclosed in the Annex . 4. The basis for payment of underwriting commission and other terms and conditions of the underwriting scheme would, however, remain unchanged. Yours faithfully (K.V. Rajan) Chief General Manager Annex Illustration of the change in minimum bidding commitment of Primary dealers in the Additional Competitive Underwriting auction Sl. No.   Name Basis Present Method Revised Method (Amount in Rs crore) Notified Amount 5000 5000 1 No. of PDs 19 19 2 Minimum Underwriting Commitment 5000/2 2500 2500 3 PD's share under MUC 2500/19 131.58 131.58 4 Rounded off to 132 132 5 Total PD commitment under MUC 132x19 2508 2508 6 Balance under AUC Total notified amount minus MUC 2492 2492 7 Minimum bid from each PD under AUC 3 per cent of notified amount 150 132 8 Total commitment under ACU for each PD (Sr. No. 4+ Sr. No. 7) 282 264 9 Total commitment under ACU for all PDs (Sr No. 7 x Sr. No.1) 2850 2508 10 Total Underwriting (5+9) 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. 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Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2007-2008/186 · issued 14 Nov 2007. The plain-English explanation above is BankPulse’s own independent summary.
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Worked example & action-note template

Example: if you are a Compliance officer 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 Minimum Bidding for PDs in ACU Auctions” is: “Update your internal bidding guidelines to reflect that the minimum bid in ACU auctions is now your firm's MUC amount.” (RBI issued this 14 Nov 2007).

  1. Circular: RBI/2007-2008/186 -- Revised Minimum Bidding for PDs in ACU Auctions
  2. Issued: 14 Nov 2007
  3. Action required: Update your internal bidding guidelines to reflect that the minimum bid in ACU auctions is now your firm's MUC amount.
  4. Action required: Ensure your treasury team recalculates bid limits based on the revised formula.
  5. Action required: Review the illustrative annex in the circular to confirm your PD's new minimum commitment.
  6. Action required: Communicate the change to your dealing room and compliance teams immediately.
  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.

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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=3936&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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