Ref.No. IDMD 1793 /08.02.32/ 2006-07
October 27, 2006
All Scheduled Commercial Banks excluding RRBs/
All State Co-operative Banks/All Scheduled Primary
(Urban) Co-operative Banks /All Financial Institutions/
All Primary Dealers
Dear Sirs,
Auction of Government of India Dated Securities
Government of India have offered to sell (re-issue) "7.40
per cent Government Stock 2012" for a notified amount of Rs. 6,000 crore
(nominal) through a price based auction using multiple price method
vide Notification No.4 (6)-W&M/2006 dated October 27, 2006. Government of
India have also announced sale (re-issue) of "7.50 per cent Government
Stock 2034" for a notified amount of Rs.3,000 crore through a price
based auction using multiple price method vide Notification No. 4(6)-W&M/2006
(i) dated October 27, 2006. The auctions will be conducted by Reserve Bank of
India at Mumbai on November 3, 2006. The salient features of the auctions and
the terms and conditions governing the issue of the Stocks are given in the
Notifications (copies enclosed), which should be read along with the General
Notification F.No.4 (9)-W&M/2000 dated May 6, 2002 issued by Government
as amended from time to time.
- We wish to draw your attention, in particular, to the following:
- The Stocks will be issued for a minimum amount of Rs.10, 000/- (nominal)
and in multiples of Rs.10,000/- thereafter.
- The competitive bids should be submitted in the prescribed form of application
given in Annexure I/II, before 12.30 P.M. on November 3, 2006 in sealed covers
superscribed "Tender for 7.40 per cent Government Stock 2012 ' or, 'Tender
for 7.50 per cent Government Stock 2034" (as the case may be) and deposited
in the appropriate tender box kept for the purpose at Reserve Bank of India,
Fort, Mumbai. The price percent expected by the bidder should be expressed
up to two decimal points.
- For both the auctions, Government Stock up to 5% of the notified amount
of sale will be allotted to the eligible individuals and institutions under
the Scheme for Non-competitive Bidding Facility in the Auctions of Government
Securities (enclosed with the Notifications F. No.4 (6)-W&M/2006 and F.
No.4 (6)-W&M/2006 (i) both dated October 27, 2006). The non competitive
bids should be submitted in the prescribed form of application given in Annexure
I(a)/II(a) by 12.30 P.M. on November 3, 2006 in sealed covers superscribed
"Non-competitive bid for 7.40 per cent Government Stock 2012' or, 'Non-Competitive
bid for 7.50 per cent Government Stock 2034" (as the case may be) and
deposited in the appropriate tender box kept for the purpose at Reserve Bank
of India, Fort, Mumbai.
- The NDS members should submit competitive as well as non-competitive bids
in electronic format using Primary Market Operation (PMO) module of NDS.
All bids should be submitted by 12.30 P.M.
- An investor can submit more than one bid at different prices but a separate
application should be submitted for each bid. The aggregate amount of bids
submitted by a person in an auction should not exceed the notified amount
of auction.
- On the basis of bids received, the Reserve Bank will determine the minimum
price up to which tenders for purchase of Government Stock will be accepted
at the auctions. Bids quoted at rates lower than the minimum price determined
by the Reserve Bank of India will be rejected. Reserve Bank of India will
have the full discretion to accept or reject any or all bids either wholly
or partially without assigning any reason.
- The result of the auctions will be displayed at Reserve Bank of India, Mumbai
Office, Fort, Mumbai on November 3, 2006. Successful bidders will be required
to deposit with the Reserve Bank of India, Public Debt Office, Fort, Mumbai,
the amount payable for the Government Stock allotted to them in cash or by
cheque on their account with Reserve Bank of India, Mumbai or by Banker’s
pay order payable at Mumbai, along with a covering letter on November 6, 2006
before 3.00 P.M. In case of current account holders, the amount payable will
be debited to their respective current accounts maintained with the Reserve
Bank of India.
- The Government Stocks will be issued by credit to Subsidiary General Ledger
Account (SGL) of parties maintaining such account with Reserve Bank of India
or in the form of Stock Certificate. Interest on the Government Stock will
be paid half-yearly.
- The Government Stocks will be repaid at par on May 3, 2012 and August 10,
2034, respectively.
- The Stocks will qualify for ready forward facility.
(xi) Both the Stocks will be eligible for "When Issued"
trading for a period commencing from October 30, 2006 to November 3, 2006 in
accordance with the guidelines on ‘When
Issued’ transactions in Central Government Securities’issued by the Reserve
Bank of India vide circular No. RBI /2005-06/382 dated May 3, 2006.
Yours faithfully,
(R. Subramanian)
Deputy General Manager |