Payment
Payment for purchase of 14 and 91-day T-bills by successful bidders has
to be made on the Saturday following the Friday auction; and payment by successful bidders
for 182-day and 364-day T-bills has to be made by successful bidders on the following
Thursday. Payment by successful bidders at the auction are required to be made by
cash/cheque drawn on the Reserve Bank of India or by Banker’s Pay Order.
Participation
Provident funds can participate in 14 and 91-day T-bill auctions as
non-competitive bidders. Provident funds as yet are not allowed to purchase 182-day and
364-day T-bills as non-competitive bidders. Participation as non-competitive bidders would
mean that provident funds need not quote the rate of yield at which they desire to buy
these bills. The Reserve Bank allots bids to the non-competitive bidders at the weighted
average yield arrived at on the basis of the yields quoted by accepted competitive bids at
the auction. Allocations to non-competitive bidders are outside the amount notified for
sale. In other words, provident funds do not face any uncertainty in purchasing the
desired amount of T-bills from the auctions.
Where to purchase from?
T-bills auctions are held at the Reserve Bank of India, Mumbai. For
this purpose the provident funds need to submit their bids to Mumbai office of the Reserve
Bank in the prescribed form.
Those provident funds located outside Mumbai could send their bids well
in advance either through fax (No. 022-2693332) or by mail to the Chief General Manager,
Public Accounts Department, Reserve Bank of India, Fort, Mumbai – 400 001.
Dated Securities
Government paper with tenor beyond one year is known as dated security.
At present, there are dated securities with a tenor up to 20 years in the market.
Auction/Sale
Dated securities are sold through auctions or through sale. Actually,
the sale or auction in dated security would mean that the coupon for the security is
either auctioned or is fixed. Fixed coupon securities are sometimes also sold on tap that
is kept open for a few days.
Announcement
Though there is no calendar for G-secs sale, the Government of India
and the Reserve Bank issue a press release to announce the sale. The press release is
widely reported in the print media and wire agencies. The government of India also issues
an advertisement in the leading financial newspapers. The announcement of auctions/sales
and their results are also published on the Reserve Bank website (URL:http://www.rbi.org.in)
Amount
Subscriptions can be for a minimum amount of Rs.10,000 and in multiples
of Rs.10,000.
Where are the sales held?
Auctions and sales are normally conducted at the office of the Reserve
Bank of India, Mumbai. Provident funds can submit their competitive bids/applications in
the prescribed form available at the time of auction/sale of securities to the Chief
General Manager, Public Debt Office, Reserve Bank of India, Fort, Mumbai 400 001 (Fax:
022-266 2721/022-266 0817).
Payment
In the case of auctions, the payment by successful bidders has to be
made normally on the day following the auction day. In case of fixed coupon/tap sales,
payment has to accompany the application form. The payment has to be made by cash/cheque
drawn on the Reserve Bank of India or by Banker’s Pay order.
State Government Securities
These are securities issued by the state governments. The issues are
also managed and serviced by the Reserve Bank of India.
The tenor of state government securities is normally ten years. State
government securities are available for a minimum amount of Rs.1,000 and in multiples of
Rs.1,000. These are available at a fixed coupon rate. Of late, however, some state
governments have started auctioning their own securities. These securities could be
purchased through a wide network of offices of both, the Reserve Bank of India and the
State Bank of India and its associate banks.
Availability of G-secs
Apart from purchasing government securities from the Reserve Bank of
India through its auctions/sales, all types of government paper can be purchased from the
secondary market. Accredited Primary Dealers and Satellite Dealers also purchase and sell
securities.
Even the Reserve Bank of India sells government securities through its open market
operations window. The list of securities available from the Reserve Bank’s open
market operations window is issued by the Reserve Bank of India from time to time and is
well-publicised. Securities placed for sale on the Reserve Bank’s open market
operations window can be purchased through its Ahmedabad, Bangalore, Calcutta, Chennai,
Hyderabad, Kanpur, New Delhi, and Mumbai offices.