RBI schedules underwriting auction for Rs 32,000 crore government securities on May 22
New Delhi, May 21
The Government of India is set to conduct an underwriting auction for the sale of Government Securities for Rs 32,000 crore on Friday. According to the Reserve Bank of India, the entire notified amount for the new securities is subject to this underwriting process.
The RBI stated that, "As per the extant scheme of underwriting commitment notified on November 14, 2007, the amounts of Minimum Underwriting Commitment (MUC) and the minimum bidding commitment under Additional Competitive Underwriting (ACU) auction, applicable to each Primary Dealer (PD), are as under."
The 6.03 per cent GS 2029 and the 6.68 per cent GS 2033 securities each carry a notified amount of Rs 11,000 crore. Additionally, the government intends to raise Rs 10,000 crore through the 7.24 per cent GS 2055 bonds.
For the securities maturing in 2029 and 2033, the Minimum Underwriting Commitment per Primary Dealer is fixed at Rs 262 crore. The same amount applies as the minimum bidding commitment under the Additional Competitive Underwriting auction for these specific papers.
Meanwhile, for the longer-dated 2055 security, the MUC and minimum bidding commitment are set at Rs 239 crore per Primary Dealer.
"The underwriting auction will be conducted through multiple price-based method on May 22, 2026 (Friday)," the RBI noted regarding the procedural aspects of the sale.
Primary Dealers must submit their bids for the ACU auction through the Reserve Bank of India Core Banking Solution, also known as the e-Kuber system. The operational window for these electronic submissions is strictly scheduled between 09:00 A.M. and 09:30 A.M. on the day of the auction.
"The underwriting commission will be credited to the current account of the respective PDs with RBI on the day of issue of securities," the central bank said, clarifying the settlement process for the participating entities.
— ANI
Reader Comments
Honestly, as a common citizen, this kind of news goes over my head. But if it helps keep interest rates stable and inflation in check, I'm all for it. The RBI and government need to be more transparent about where this money goes — infrastructure, healthcare, education? Just saying. 🤷♀️
Good to see the RBI sticking to its disciplined approach. The MUC of Rs 262 crore per PD for the 6.03% GS 2029 and 6.68% GS 2033 seems reasonable. However, I worry about the long-term impact of so much borrowing on bond yields. The 7.24% GS 2055 at Rs 10,000 crore is a big bet on future growth. Hope it pays off.
The e-kuber system makes it efficient. But why only 30 minutes for bidding? That's very tight! Primary dealers must be on their toes at 9 AM sharp. Hope commission rates are competitive enough to attract all PDs, not just the big ones. Smaller PDs need support too. 📈
Interesting to see the Indian government using underwriting auctions — a common practice in developed markets too. The staggered maturity profile (2029, 2033, 2055) shows prudent liability management. The 2055 bond at 7.24% is attractive for long-term investors like pension funds. This will add depth to India's bond market.
I wish the RBI would explain these things in simpler language for common people. "Minimum Underwriting Commitment", "Additional Competitive Underwriting" — sounds like jargon! But I understand
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