What changed
The Government of India is re-issuing four dated securities with tenors from 2020 to 2042 for a total notified amount of ₹16,000 crore. The auction will be price-based with uniform pricing, and both competitive and non-competitive bids must be submitted electronically on the E-Kuber system.
What it means for you
Banks and primary dealers need to prepare for the auction on May 23, 2014, with settlement on May 26. The uniform price method means all successful bidders pay the same price. Non-competitive bidders get allotment at the weighted average yield. These securities qualify for ready forward and when-issued trading, enhancing liquidity management.
What you must do
- Submit competitive bids electronically on E-Kuber between 10:30 AM and 12:00 noon on May 23, 2014.
- Submit non-competitive bids (if applicable) between 10:30 AM and 11:30 AM on the same day.
- Ensure bids do not exceed the notified amount per auction and are in multiples of ₹10,000.
- Prepare for settlement on May 26, 2014, by crediting SGL accounts or issuing stock certificates.
- Review the Government of India notification and General Notification F.No. 4(13)-W&M/2008 for detailed terms.
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
What is the minimum bid amount for these securities?
The minimum bid amount is ₹10,000 (nominal), and bids must be in multiples of ₹10,000 thereafter.
Can we submit bids in physical form?
No, bids must be submitted electronically on the RBI Core Banking Solution (E-Kuber) system. Physical bids are not accepted except in extraordinary circumstances.
What is the non-competitive bidding facility?
Up to 5% of the notified amount is reserved for eligible individuals and institutions under the non-competitive scheme. Banks or primary dealers submit a single consolidated non-competitive bid on behalf of their constituents, and allotment is at the weighted average rate from competitive bidding.