The sale of government bonds worth Rs 38 thousand crore was announced by the finance ministry. The sale has been announced through the Reserve Bank of India’s (RBI) new multiple price auction system. According to a statement issued by the Ministry of Finance, these include:
(i) “7.33 percent Government Security 2026” will be sold through price-based auction using multiple price method for a notified amount of Rs.6,000 crore.
(ii) “New Government Securities 2034” will be sold for a notified amount of Rs.20,000 crore through yield-based auction using multi-price method.
(iii) Sale of “7.25 Percent Government Securities 2063” for a notified amount of Rs.12,000 crore through price-based auction using multi-price method.
The government will have the option to retain additional subscriptions of up to Rs 2,000 crore against each security, the statement said. The auction process will be conducted by RBI’s Mumbai office on 5th April (Friday).
Up to 5 percent of the notified amount of sale of securities to eligible persons and institutions in auction of government securities will be allotted as per non-competitive bidding facility scheme.
Both competitive and non-competitive bids should be submitted in electronic format for the auction on April 5 on RBI’s Core Banking Solution (e-Kuber) system. Time for submission of both competitive and non-competitive bids is also specified. Non-competitive bids must be submitted between 12:30 pm and 1 pm, while competitive bids must be submitted between 12:30 pm and 1:30 pm.
The results of the auction will be announced on the same day. Successful bidders will be paid on April 8.
The RBI on its part announced that it has decided in consultation with the Government of India in review of market conditions that henceforth all securities will be auctioned under the Government’s market lending program using the price method.