RBI auction ahead of Treasury Bills and Government Securities

Auction of State Government Securities

The following State Governments have offered to sell the following security by way of the auction for an aggregate amount of INR 13,975 Cr (Face Value).

Sr.No.	State	Amount to be raised (Cr)	Tenure of SDL (in Years)	Type of Auction
1.	Andhra Pradesh	1400	10	Yield
2.	Assam	500	10	Yield
3.	Gujarat	1000	10	Yield
4.	Haryana	500	10	Yield
5.	Himachal Pradesh	500	10	Yield
6.	Jammu & Kashmir	600	10	Yield
7.	Kerala	1000	10	Yield
8.	Maharashtra	2000	Re-issue	Re-issue 7.18% Maharashtra SDL 2029
9.	Nagaland	150	10	Yield
10.	Pondicherry	125	12	Yield
11.	Punjab	300	10	Yield
12.	Rajasthan	1500	10	Yield
13.	Tamil Nadu	2000	10	Yield
14.	Uttarakhand	400	10	Yield
15.	West Bengal	2000	10	Yield
	Total	13,975
# Gujarat will have an option to retain additional ₹ 300 Cr under the green shoe

The auction will be conducted on the Reserve Bank of India Core Banking Solution (E-Kuber) system on February 20, 2018 (Tuesday). The Government Stock up to 10% of the notified amount of the sale of each of the stock will be allotted to eligible individuals and institutions subject to a maximum limit of 1% of its notified amount for a single bid per stock as per the Scheme for Non-competitive Bidding Facility (available on RBI website).

Both competitive and non-competitive bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system on February 20, 2018 (Tuesday). The non-competitive bids should be submitted between 10.30 A.M. and 11.30 A.M. and the competitive bids should be submitted between 10.30 A.M. and 12.00 noon.

The yield percent per annum expected by the bidder should be expressed up to two decimal points. An investor can submit more than one competitive bid at different prices in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system. However, the aggregate amount of bids submitted by a bidder should not exceed the notified amount for each State.

The Reserve Bank of India will determine the maximum yield/minimum price at which bids will be accepted. Securities will be issued for a minimum nominal amount of ₹ 10,000.00 and multiples of ₹ 10,000.00 thereafter.

The results of the auction will be announced on February 20, 2018 (Tuesday) and payment by successful bidders will be made during banking hours on February 21, 2018 (Wednesday) at Mumbai and at respective Regional Offices of RBI.

The State Government Stocks will bear interest at the rates determined by RBI at the auctions. Interest will be paid half yearly on August 21 and February 21 of each year till maturity for the new securities. The Stocks will be governed by the provisions of the Government Securities Act, 2006 and Government Securities Regulations, 2007.

The investment in State Government Stocks will be reckoned as an eligible investment in Government Securities by banks for the purpose of Statutory Liquidity Ratio (SLR) under Section 24 of the Banking Regulation Act, 1949. The stocks will qualify for the ready forward facility.

Auction of Government of India Treasury Bills

In the press release dated 16 Feb 2018 the Reserve Bank of India has announced the auction of 364-day Government of India Treasury Bills for notified amount of ₹ 4,000 Crore, auction of 182- day Government of India Treasury Bills for notified amount of ₹ 3,000 Crore and auction of 91-day Government of India Treasury Bills for notified amount of ₹ 7,000 Crore. The sale will be subject to the terms and conditions specified in the General Notification F.No.4 (8)-W&M/2015 dated May 26, 2016, issued by Government of India, as amended from time to time. State governments, eligible provident funds in India, designated Foreign Central Banks and any person or institution specified by the Bank in this regard, can participate on a non-competitive basis, the allocation for which will be outside the notified amount. Individuals can also participate on a non-competitive basis as retail investors. For retail investors, the allocation will be restricted to a maximum of 5 percent of the notified amount.

The auction will be conducted on February 21, 2018, using “Multiple Price Auction” method. The competitive bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system between 10.30 a.m. and 12.00 noon on Wednesday, February 21, 2018. The non-competitive bids should be submitted between 10.30 a.m. and 11.30 a.m. Results will be announced on the same day. Payment by successful bidders will be on Thursday, February 22, 2018.

General Notification F.No.4 (8)-W&M/2015 dated May 26, 2016

Sale of Government of India Treasury Bills by Auction

Government of India
Ministry of Finance
(Department of Economic Affairs)NotificationNew Delhi, May 26, 2016Subject: Sale of Government of India Treasury Bills by AuctionF.No.4 (8)-W&M/2015: In supersession of Government notifications No. F.4 (14)-W&M/86 dated 18th November 1986; No. F.2 (17)-W&M/92 dated Ist January 1993; No. F.2 (17)-W&M/92 dated 4th July 1994; No. F.2 (1)-W&M/97 dated 20th May 1997; No. F.2(1)-W&M/97(i) dated 20th May 1997; No F. 2(12)-W&M/97 dated 31st March 1998 and F.No.2(12)-W&M/97 dated 19th April 2016, the Government of India hereby notifies the sale of “Government of India Treasury Bills” (hereinafter the “Bills”) on auction basis.Main Features:2. (i) The Bills of varying maturities with a maximum tenure of up to 364 days will be sold by the Reserve Bank of India (hereinafter called “the Bank”) on the auction basis. The date and place of auction and the exact tenor of bills will be announced by the Bank from time to time.(ii) The Bank will notify the nominal amounts of bills to be sold to competitive bidders from time to time.(iii) The Bank may make allocations at the auctions by means of either ‘uniform price auction’ or ‘multiple price auction’. The method of the auction will be announced by the Bank from time to time.(iv) The Bills would be issued at a discounted price.(v) In respect of competitive bids, the rate of discount and the corresponding issue price would be determined at each auction. In the case of uniform price auction, competitive bids will be accepted at the minimum discounted price called cut-off price determined at the auction, irrespective of bid prices tendered. In the case of multiple price auction, competitive bids will be accepted up to the minimum discounted price called ‘cut off’ price determined at the auction, at bid prices tendered at the auction. Competitive bids at offer prices lower than the ‘cut off’ price will be rejected in the case of both uniform and multiple price auctions(Illustrations in Annexure-I).(vi) Allocation for ‘non-competitive’ bids will be at the discretion of the Bank. These non-competitive bids will be outside the notified amount. Such allocation for ‘non-competitive’ bids will be at the weighted average price arrived at on the basis of the competitive bids accepted at the auction.

(vii) The Bank will have the full discretion to accept or reject any or all the bids either wholly or partially, as deemed fit by it, without assigning any reason.

(viii) The Bank may if it considers appropriate to do to participate in the auction as a ‘non-competitor’ and buy bills for part of or the whole of the amount notified at the cut-off price decided in the auction.

Eligibility for Investment:

3. The investment in the Treasury Bills, through competitive route, may be made by any person resident in India, including firms, companies, corporate bodies, institutions, and Trusts. Non-Resident Indians and Foreign Investors are eligible to invest subject to the approval of the Government and provisions of Foreign Exchange Management Act, 1999 and the Regulations framed thereunder, in addition to the other provisions of laws applicable to Government Securities.

4. Eligible entities could participate on ‘non-competitive’ basis in auctions for specified Bills as decided by the Bank from time to time. The State Governments, eligible provident funds in India, the Nepal Rashtra Bank and any Person or Institution, specified by the Bank, with the approval of Government, in this regard, can participate on a non-competitive basis. Individuals can also participate on a non-competitive basis as retail investors. For retail investors, the allocation will be restricted to a maximum of 5 percent of the aggregate nominal amount of the issue, within the notified amount as specified by the Government of India, or any other percentage determined by Reserve Bank of India.

Explanation: The allocation for individuals shall be within notified amount and for other eligible entities outside notified amount.

Note: Eligible Provident Funds are those non-government provident funds governed by the Provident Funds Act 1925 and Employees’ Provident Fund and Misc. Provisions Act, 1952 whose investment pattern is decided by the Government of India.

Tenders for the purchase of Government of India Auction Treasury Bills:

5. (i) Details of the procedure relating to auction for sale of the Bills will be announced by the Bank from time to time.

(ii) Intending investors would be required to submit their tender at the designated offices of the Bank, as notified by it, on the day of the auction, up to the close of banking hours for the issue of bills in the prescribed Application Form (Annexure II for investors other than State Governments and Nepal Rastra Bank and Annexure III for State Governments and Nepal Rastra Bank).

(iii) A competitive bidder would be eligible to submit multiple tenders at different prices in separate forms. Applications which do not contain necessary details such as the nominal value of the Bill and the price per ₹ 100/- at which the Bills are proposed to be purchased are liable to be rejected without reference to the applicant.

(iv) The successful bidder/s would be required to deposit the requisite amount to the Bank by cash/ cheque/ DD/ e-banking/ Banker’s Pay Order or by authorization to debit their current Account at Reserve Bank of India.

Note: The bidders are required to submit Cash / Cheque / DD / Banker’s Pay Order, etc. in full while submitting his application/ tender.

Minimum Subscription:

6. Bills will be issued for a minimum amount of ₹ 10,000/- (Rupees Ten Thousand only) and in multiples of ₹ 10,000/- on a competitive basis, as well as on non-competitive basis.

Form:

7. The Bills will be issued in the form of Promissory Note/ Credit to Subsidiary General Ledger (S.G.L.) Account.

Transferability:

8. The bills will be transferable in terms of the Government Securities Act, 2006 and the Government Securities Regulations, 2007.

Repayment:

9. The Bills will be repaid at par on the expiration of their tenor at the office of the Bank at which they are registered.

Laws applicable in regard to the Bills:

10. (i) The rights of all persons subscribing to or holding the Bills shall be determined in accordance with the provisions of the Government Securities Act, 2006 and the Government Securities Regulations 2007, read with the terms of this Notification, and such other Notifications as may be issued from time to time by the Bank, in consultation with Government of India in this regard.

(ii) The tax laws in India will apply for the purpose of assessing and determining the liability of the investor or holder of the Bills.

(iii) Any dispute in relation to the Bills shall be decided by the Courts in India.

Source from Reserve Bank of India

RBI auction ahead of Treasury Bills and Government Securities

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