The Government of India will conduct an underwriting auction for government securities worth Rs 32,000 crore on May 15, with the Reserve Bank of India outlining the bidding process and participation norms for primary dealers.
In a notification issued on Thursday, the RBI said the underwriting auction would cover the full notified amount of the securities scheduled for sale through auction on Friday.
The borrowing programme includes Rs 21,000 crore of the ‘6.36 per cent GS 2031’ and Rs 11,000 crore under the ‘New GS 2066’ security.
The central bank said the underwriting auction would follow a multiple price-based method, allowing participants to submit bids at varying price levels.
Under the existing underwriting framework, primary dealers are required to meet both the Minimum Underwriting Commitment (MUC) and the Additional Competitive Underwriting (ACU) obligations for the auction.
Bids Through E-Kuber
According to the RBI, primary dealers must submit bids electronically through the central bank’s Core Banking Solution, e-Kuber, between 9:00 am and 9:30 am on the day of the auction.
The underwriting mechanism is aimed at ensuring adequate demand for government securities and smooth completion of the government’s market borrowing programme.
The RBI also said commissions related to underwriting services would be credited to the current accounts of the respective primary dealers on the date of issuance of the securities. |
