Month: September 2021

Government of India (GOI) has announced the sale (issue/re-issue) of four dated securities for a notified amount of ₹31,000 crore as per the following details:

Sr No	Security	Date of Repayment	Notified Amount (₹ crore)	GoI specific Notification	Auction Date	Settlement Date
1	5.63% GS 2026	April 12, 2026	11,000	F.No.4(3)-B(W&M)/2021 dated September 03, 2021	September 09, 2021 (Thursday)	September 13, 2021 (Monday)
2	GOI FRB 2034 *	October 30, 2034	3,000
3	New GS 2035	December 15, 2035	10,000
4	6.67% GS 2050	December 17, 2050	7,000
	Total		31,000
*The base rate for the coupon payment for the period August 30, 2021 to October 29, 2021 for GOI FRB 2034 shall be 3.47 per cent per annum.

2. GoI will have the option to retain additional subscription up to ₹8,000 crore against above security/securities.

3. The securities will be sold through Reserve Bank of India Mumbai Office, Fort, Mumbai – 400001, The sale will be subject to the terms and conditions spelt out in the ‘Specific Notification’ mentioned above and the General Notification F.No.4(2)–W&M/2018, dated March 27, 2018.

4. The auction will be conducted using uniform price method for 5.63% GS 2026, GoI FRB 2034, New GS 2035 and multiple price method for 6.67% GS 2050. 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 September 09, 2021 (Thursday). The non-competitive bids should be submitted between 10.30 a.m. and 11.00 a.m. and the competitive bids should be submitted between 10.30 a.m. and 11.30 a.m. The result will be announced on the same day and payment by successful bidders will have to be made on September 13, 2021 (Monday).

5. Bids for underwriting of the Additional Competitive Underwriting (ACU) portion can be submitted by ‘Primary Dealers’ from 9.00 a.m. up to 9.30 a.m. on September 09, 2021 (Thursday) on the Reserve Bank of India Core Banking Solution (E-Kuber) system.

6. The Stocks will be eligible for “When Issued” trading for a period commencing from September 06, 2021 – September 09, 2021.

7. Operational guidelines for Government of India dated securities auction and other details are given in the Annex.

Ajit Prasad
Director   

Press Release: 2021-2022/810

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ANNEX

Type of Auction

1. For multiple price-based auction, successful bids will get accepted at the respective quoted yield/price for the security. For uniform price-based auction, bids will get accepted at the cut off yield/price accepted in the auction.

2. The auction will be yield based for new security and price based for securities which are re-issued.

3. In case of a Floating Rate Bonds (FRB), the auction will be spread-based for new security and price based for securities which are reissued. At the time of placing bids for new FRB, the spread should be quoted in percentage terms.

Minimum Bid Size

4. The Stocks will be issued for a minimum amount of ₹10,000/- (nominal) and in multiples of ₹10,000/- thereafter.

Non-Competitive Segment

5. In all 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.

6. Each bank or Primary Dealer (PD) on the basis of firm orders received from their constituents will submit a single consolidated non-competitive bid on behalf of all its constituents in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system.

7. Allotment under the non-competitive segment to the bank or PD will be at the weighted average rate of yield/price of the successful bids that will emerge in the auction on the basis of the competitive bidding.

Submission of Bids

8. 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.

9. Bids in physical form will not be accepted except in extraordinary circumstances.

Business Continuity Plan (BCP)-IT failure

10. Only in the event of system failure, physical bids will be accepted. Such physical bids should be submitted to the Public Debt Office, Mumbai through (email; Phone no: 022-22632527, 022-22701299) in the prescribed form which can be obtained from RBI website (https://www.rbi.org.in/Scripts/BS_ViewForms.aspx) before the auction timing ends.

11. In case of technical difficulties, Core Banking Operations Team should be contacted (email; Phone no: 022-27595666, 022-27595415, 022-27523516).

12. For other auction related difficulties, IDMD auction team can be contacted (email; Phone no: 022-22702431, 022-22705125).

Multiple Bids

13. An investor can submit more than one competitive bid in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system.

14. However, the aggregate amount of bids submitted by a person in an auction should not exceed the notified amount of auction.

Decision Making Process

15. 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.

16. Bids quoted at rates lower than the minimum price determined by the Reserve Bank of India will be rejected.

17. 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.

Issue of Securities

18. Issue of securities to the successful bidders will be 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.

Periodicity of Interest Payment

19. Interest on the Government Stock will generally be paid half-yearly other than in case of securities with non-standard maturities. The exact periodicity of coupon payment is invariably mentioned in the specific notification for the issue of security.

Underwriting of the Government Securities

20. The underwriting of the Government Securities under auctions by the ‘Primary Dealers’ will be as per the “Revised Scheme of Underwriting Commitment and Liquidity Support” announced by the Reserve Bank vide circular RBI/2007-08/186 dated November 14, 2007 as amended from time to time.

Eligibility for Repurchase Transactions (Repo)

21. The Stocks will eligible for Repurchase Transactions (Repo) as per the conditions mentioned in Repurchase Transactions (Repo) (Reserve Bank) Directions, 2018 (Reserve Bank) Directions, 2018 as amended from time to time.

Eligibility for ‘When Issued’ Trading

22. The Stocks will be eligible for “When Issued” trading in accordance with the guidelines on ‘When Issued transactions in Central Government Securities’ issued by the Reserve Bank of India vide circular No. RBI/2018-19/25 dated July 24, 2018 as amended from time to time.

Investment by Non-Residents

23. Investments by Non-Residents are subject to the guidelines on ‘Fully Accessible Route’ for Investment by Non-residents in Government Securities and Investment by Foreign Portfolio Investors (FPI) in Government Securities: Medium Term Framework (MTF).

The Reserve Bank of India (RBl) has imposed, by an order dated September 03, 2021, a monetary penalty of ₹2.00 lakh (Rupees Two Lakh only) on The Akola District Central Co-operative Bank Limited, Akola, Maharashtra (the bank) for non-compliance with certain provisions of the directions issued by RBI contained in the Reserve Bank of India – (Know Your Customer (KYC)) Direction, 2016. This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949, taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI. This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. Background The inspection report of the bank based on its financial position as on March 31, 2019 and the Inspection Report pertaining thereto revealed, inter alia, that the bank had failed to put in place a robust system for throwing alerts as part of effective identification and monitoring of suspicious transactions, resulting in non-compliance with directions issued by RBI. In furtherance to the same, a Notice was issued to the bank advising it to show cause as to why penalty should not be imposed for non-compliance with the directions. After considering the bank’s replies and oral submissions made during the personal hearing, RBI came to the conclusion that the aforesaid charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty. (Yogesh Dayal)      Chief General Manager Press Release: 2021-2022/809

Reserve Bank of India announces the auction of Government of India Treasury Bills as per the following details: Sr. No Treasury Bill Notified Amount (in ₹ crore) Auction Date Settlement Date 1 91 Days 9,000 September 08, 2021 (Wednesday) September 09, 2021 (Thursday) 2 182 Days 4,000 3 364 Days 4,000   Total 17,000     The sale will be subject to the terms and conditions specified in the General Notification F.No.4(2)-W&M/2018 dated March 27, 2018 along with the Amendment Notification No.F.4(2)-W&M/2018 dated April 05, 2018, 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 non-competitive basis, the allocation for which will be outside the notified amount. Individuals can also participate on 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 Price based using multiple price method. Bids for the auction should be submitted in electronic format on the Reserve Bank of India’s Core Banking Solution (E-Kuber) system on Wednesday, September 08, 2021, during the below given timings: Category Timing Competitive bids 10:30 am – 11:30 am Non-Competitive bids 10:30 am – 11:00 am Results will be announced on the day of the auction. Payment by successful bidders to be made on Thursday, September 09, 2021. Only in the event of system failure, physical bids would be accepted. Such physical bids should be submitted to the Public Debt Office (email; Phone no: 022-22632527, 022-22701299) in the prescribed form obtainable from RBI website (https://www.rbi.org.in/Scripts/BS_ViewForms.aspx) before the auction timing ends. In case of technical difficulties, Core Banking Operations Team should be contacted (email; Phone no: 022-27595666, 022-27595415, 022-27523516). For other auction related difficulties, IDMD auction team can be contacted (email; Phone no: 022-22702431, 022-22705125). Ajit Prasad Director    Press Release: 2021-2022/808

The results of the auctions of 4.26% Government Stock 2023 (Re-issue), 6.10% Government Stock 2031 (Re-issue), 6.76% Government Stock 2061 (Re-issue) held on September 03, 2021 are: Auction Results 4.26% GS 2023 6.10% GS 2031 6.76% GS 2061 I. Notified Amount ₹3000 Crore ₹14000 Crore ₹9000 Crore II. Underwriting Notified Amount ₹3000 Crore ₹14000 Crore ₹9000 Crore III. Competitive Bids Received       (i) Number 76 267 242 (ii) Amount ₹18394 Crore ₹36339.016 Crore ₹33465 Crore IV. Cut-off price / Yield 100.30 99.48 96.50 (YTM: 4.0721%) (YTM: 6.1699%) (YTM: 7.0227%) V. Competitive Bids Accepted       (i) Number 5 77 18 (ii) Amount ₹2999.857 Crore ₹13988.461 Crore ₹8988.146 Crore VI. Partial Allotment Percentage of Competitive Bids 39.99% 90.84% 98.81% (4 Bids) (16 Bids) (2 Bids) VII. Weighted Average Price/Yield 100.30 99.48 96.54 (WAY: 4.0721%) (WAY: 6.1699%) (WAY: 7.0196%) VIII. Non-Competitive Bids Received       (i) Number 2 7 3 (ii) Amount ₹0.143 Crore ₹11.539 Crore ₹11.854 Crore IX. Non-Competitive Bids Accepted       (i) Number 2 7 3 (ii) Amount ₹0.143 Crore ₹11.539 Crore ₹11.854 Crore (iii) Partial Allotment Percentage 100% (0 Bids) 100% (0 Bids) 100% (0 Bids) X. Amount of Underwriting accepted from primary dealers ₹3000 Crore ₹14000 Crore ₹9000 Crore XI. Devolvement on Primary Dealers 0 0 0 Ajit Prasad Director    Press Release: 2021-2022/806

The following State Governments have offered to sell securities by way of auction, for an aggregate amount of ₹12,730 Cr. (Face Value).

Sr. No.	State/UT	Amount to be raised (₹ Cr)	Additional Borrowing (Greenshoe) Option (₹ Cr)	Tenure (Yrs)	Type of Auction
1	Bihar	2000	–	9	Yield
2	Goa	200	–	10	Yield
3	Gujarat	1500	500	10	Yield
4	Meghalaya	100	–	3	Yield
		100	–	20	Yield
5	Mizoram	80	–	13	Yield
6	Punjab	1000	–	10	Yield
		250	–	15	Yield
7	Rajasthan	1000	–	10	Yield
8	Telangana	1500	–	15	Yield
9	Uttar Pradesh	2500	–	10	Yield
10	West Bengal	2500	–	10	Yield
	TOTAL	12730

The auction will be conducted on the Reserve Bank of India Core Banking Solution (E-Kuber) system on September 07, 2021 (Tuesday). The Government Stock up to 10% of the notified amount of the sale of each 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.

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 September 07, 2021 (Tuesday). The non-competitive bids should be submitted between 10.30 A.M. and 11.00 A.M. and the competitive bids should be submitted between 10.30 A.M. and 11.30 A.M.

In case of technical difficulties, Core Banking Operations Team (email; Phone no: 022-27595666, 022-27595415, 022-27523516) may be contacted.

For other auction related difficulties, IDMD auction team can be contacted (email; Phone no: 022-22702431, 022-22705125).

Only in the event of system failure, physical bids would be accepted. Such physical bids should be submitted to the Public Debt Office (email; Phone no: 022-22632527, 022-22701299) in the prescribed form obtainable from RBI website (https://www.rbi.org.in/Scripts/BS_ViewForms.aspx) before the auction timing ends.

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 same/different rates of yield or 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 September 07, 2021 (Tuesday) and payment by successful bidders will be made during banking hours on September 08, 2021 (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. For the new securities, interest will be paid half yearly on March 08 and September 08 of each year till maturity. 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.

Ajit Prasad
Director   

Press Release: 2021-2022/807

The Reserve Bank of India (RBI) has, by an order dated September 02, 2021, imposed a monetary penalty of ₹50 lakh (Rupees fifty lakh only) on Bombay Mercantile Co-operative Bank Ltd., Mumbai (the bank) for non-compliance with directions issued by RBI contained in in the Reserve Bank of India (Co-operative Banks – Interest Rate on Deposits) Directions, 2016 and specific directions dated March 05, 2018 and April 11, 2018 issued by RBI under the Supervisory Action Framework (SAF). This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949, taking into account failure of the bank to adhere to the aforesaid directions issued by RBI. This action is based on deficiency in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. Background The statutory inspection of the bank conducted by the RBI with reference to the bank’s financial position as on March 31, 2019, the Inspection Report pertaining thereto, and examination of all related correspondence revealed, inter alia, that the bank had offered Interest rates on NRE deposits higher than those offered by it on comparable domestic rupee term deposits and had sanctioned unsecured advances, resulting in non-compliance with aforesaid directions issued by RBI. In furtherance to the same, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed for contravention of the directions issued by RBI. After considering the bank’s reply to the notice and oral submissions made in the personal hearing, RBI came to the conclusion that the aforesaid charge of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty. (Yogesh Dayal)      Chief General Manager Press Release: 2021-2022/805