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RBI to Auction Rs 34,000 Crore Govt Bond Underwriting on Friday

The Reserve Bank of India has announced an underwriting auction for the sale of a Government Security worth Rs 34,000 crore, scheduled for Friday. The security on offer is a 6.48% bond maturing in 2035, with a set Minimum Underwriting Commitment for Primary Dealers. Bids for the Additional Competitive Underwriting portion must be submitted electronically through the RBI's e-Kuber system during a specific morning window. Separately, the RBI noted that multiple state governments have collectively raised over Rs 18,000 crore through their own securities auctions.

Key Points: RBI Rs 34,000 Crore Govt Security Underwriting Auction

  • Rs 34,000 crore bond auction
  • 6.48% G-Sec maturing 2035
  • Minimum Underwriting Commitment Rs 810 crore
  • Electronic bidding via e-Kuber
2 min read

RBI announces Rs 34,000 crore underwriting auction for Government Security

RBI announces underwriting auction for Rs 34,000 crore Government Security sale on April 10. Details on MUC, ACU, and participating states.

"The underwriting auction will be conducted through a multiple price-based method on Friday. - RBI"

Mumbai, April 9

The Reserve Bank of India on Thursday announced that an underwriting auction for the sale of Government Security amounting to Rs 34,000 crore will be held tomorrow.

According to the RBI, the Government of India has notified the sale (re-issue) of one Government Security through an auction scheduled for tomorrow.

The security on offer is worth Rs 34,000 crore of 6.48 per cent Government Security maturing in 2035, with Minimum Underwriting Commitment (MUC) amount per Primary Dealer (PD) fixed at Rs 810 crore.

Under the extant scheme of underwriting commitment notified on November 14, 2007, the amounts of Minimum Underwriting Commitment (MUC) and the minimum bidding commitment under the Additional Competitive Underwriting (ACU) auction have been specified for Primary Dealers (PDs).

The underwriting auction will be conducted through a multiple price-based method on Friday. Primary Dealers (PDs) may submit their bids for the Additional Competitive Underwriting (ACU) auction electronically through the Reserve Bank of India's Core Banking Solution (e-Kuber system) between 9:00 am and 9:30 am on April 10.

The underwriting commission will be credited to the current accounts of the respective PDs with the RBI on the day of issue of the securities.

The Reserve Bank of India (RBI) earlier also announced that multiple state governments have raised a total of Rs 18,159 crore through the auction of State Government Securities (SGS).

Among the participating states, Andhra Pradesh plans to raise Rs 2,200 crore through two securities with tenors of 12 and 25 years. Himachal Pradesh will raise Rs 900 crore with a 10-year tenor, while Maharashtra will borrow Rs 3,600 crore through three securities worth Rs 800, 1,600, and 1,200 with tenors of 5, 13, and 23 years, respectively. Meghalaya will raise Rs 259 crore via a 10-year security.

- ANI

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Reader Comments

R
Rohit P
Rs 34,000 crore is a huge amount! It shows the government's funding needs are high. While necessary for development, I hope this borrowing is used for productive infrastructure projects and not just to fill budget gaps.
A
Aditya G
The details about state borrowings are also interesting. Maharashtra borrowing Rs 3,600 crore... hope our state governments are using these funds wisely for public welfare. Transparency in the use of these funds is key.
S
Sarah B
As someone who invests in G-Secs, this is good news. The underwriting auction process seems efficient. The e-Kuber system has made participation much smoother for primary dealers. More such transparent mechanisms are welcome.
K
Karthik V
While I understand the need for government borrowing, the sheer scale always makes me a bit anxious about fiscal health. We need to see a clear roadmap for managing this debt in the long run. A respectful suggestion: maybe more public communication on the end-use of these funds would build greater trust.
M
Meera T
Good to see RBI's systematic approach. The fact that underwriting commission is credited on the same day is a positive for the primary dealers' liquidity. This kind of financial plumbing is crucial for a stable economy. 🇮🇳

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