REGD. NO. D. L.-33004/99 The Gazette of India
EXTRAORDINARY
PARTI—Section 1
PUBLISHED BY AUTHORITY
No. 107] NEW DELHI, MONDAY, APRIL 29, 2002/VAISAKHA 9, 1924
(1)
1375 GI/2002% THE GAZETTE OFINDIA: EXTRAORDINARY [PART I—She. I] 34 THE GAZETTE OF INDIA: EXTRAORDINARY [PARTI— SEC. 1]
MINISTRY OF FINANCE
(Department of Economic Affairs)
(BUDGETDrVISION)
NOTIFICATION
New Delhi, the 29th April, 2002
Auction for sale of Government Stock of 10 years
F. No. 4(9)-W&M/2002.— Government of India hereby notifies sale of Government Stock (securities) of 10 year tenure for an aggregate amount of Rs. 6,000 crore (nominal). The sale will be subject to the terms and conditions spelt out in this notification (called 'Specific Notification1) as also the terms and conditions specified in the General Notification F.No. 4(2>W&M/97 dated 1st April, 1997 issued by Government of India as amended by Notification F.No. 4(7)-W&M/99 dated 5th April, 1999.
Method -of Issue 2. The Government Stock will be sold through the Reserve Bank of India, Mumbai Office, Fort, Mumbai-400001 in the manner as prescribed in Paragraph 5.1 of the General Notification No. 4(2)-W&M/97 dated 1st April, 1997 and at a coupon rate to be determined by the Reserve Bank'of India at the auction.
Allotment to 'Non-competitive' Bidders 3. Government Stock up to 5 % of the notified amount of the sale will be allotted to eligible individuals and Institutions as p*jr the enclosed Scheme for Non-competitive Bidding Facility in the Auctions of Government Securities.
Place and Pate of Auction 4. The auction will be conducted by the Reserve Bank of India, Mumbai Office, Fort, Mumbai-400001 on May 2, 2002. The application form duly filled in with the bids should be submitted to the aforesaid office on May 2, 2002, before the close of banking hours.
Tenure 5. The Government Stock will be of ten years tenure. The tenure of the Stock will commence from May 3, 2002. The stock will be repaid at par on May 3, 2012.
Date of issue and payment for foe stock 6. The result of the auction shall be displayed by the Reserve Bank of India at its Fort, Mumbai office on May 2, 2002. The payment by successful bidders will be on May 3, 2002, i.e., the date of issue.
Interest 7. The coupon rate for the securities will be set at the cut-off yield to maturity rate decided in the auction. The interest will be payable half-yearly on November 3 and May 3.
By Order of the President of India
D, SWARUP, Addl. Secy.
3 Scheme fdr N$n-eemf>etitive Bidding Facility in the Auctions of Government Securities I Scope ; Witk A view to encouraging wider participation and retail holding of Government Securities it JsipropQ^d tO; allow participation oo "non-competitive" basis in select auctions of dated Government of India, sspgrities. Accordingly, non-competitive bids up to 5 per cent of the notified amount will be accepted, jn the auctions of dated securities. The reserved amount will be within the notified amount.
H. F,tyg|frfffiyt Participation on a non-competitive basis in the auctions of dated GOI Securities will be open to investors who satisfy the following:
1. 4o not ^aiijtaip current account (CA) or Subsidiary General Ledger (SGL) account with the Reserve, Bank pf India.
Obcdepticm?: t Regional Rural Banks (RRBs), Urban Cooperative Banks (UCBs) and Non- Bankiflg Fuw^ial Companies (NBFCs) shall be covered under this Scheme in view of their statutory obligations.
• 2i tnake a #igfel?id for an amount not more than Rsr one crore
3. aubwattiwpir frifi indirectly through any one bank or PD offering this scheme.
[£jfc^faw*>fRe,gJi9nal Rural Banks (RRBs), Urban Co-operative Banks (UCBs) and Non- Banking, Fiftafl^LpQmjjanies (NBFCs) shall be eligible to submit their non competitive bids directly.
I ll Cpveraffis Subject, to the conditions mentioned above, participation on "non-competitive" bqstsis open to a^ny person including firms, companies, corporate bodies, institutions, provident firtsds, trusts, and any other entity as may be prescribed by RBI. The minimum amount for bidding witttbeR&.d.QjQGO (faqe value) and thereafter in multiples in Rs. 10,000 as hitherto for dated stocks.
IV, Other Qwrationajl Guidelines:
1 It wU} noi, be mandatory for the retail investor to maintain a constituent subsidiary genial' ledger (CSGL) account with the bank or PD through whom they wish to paijicjjptate- However, an investor can make only a single bid under this scheme. An lindertak^g fa fhe effect that the investor is making only a sipgle bid will have to be
2 Eacty,b.a/ik( QX PD on the basis of firm orders submit a single customer bid for the aggregate amount on the day of the auction. Details of individual customers viz. name, WlKroot, "$?, ,shall be provided as an Annexure to the bid.
3 Allotment under the non-competitive segment to the bank or PD will be at the weighted fUyeragefafri of yield/price that will emerge in the auction on the basis of the competitive bidding.^jfthe,securities will be issued to the bank or PD against payment on the date of *(WUeriB"8Defttive of whether the bank or PD has received payment from their clients.
6 THE GAZETTE OF INDIA: EXTRAORDINARY [PART I—SEC 1]4. In case the aggregate amount of bid is more than the reserved amount (5% of notified amount), pro rata allotment would be made. In case of partial allotments, it will be the responsibility of the bank or PD to appropriately allocate securities to their clients in a transparent manner.
5. In case the aggregate amount of bids U less than the reserved amount, the shortfall
will be taken to competitive portion.
6. Security would be issued only in SGL form by,RBI. RBI would credit either the main SGL account or the CSGL account of the bank or PD as indicated by them. The facility for affording credit to the main SGL account is for the sole purpose of servicing investors who are not their constituents. Therefore, the bank or PD would have to indicate clearly at the time of tendering the non-competitive bids the amounts (face value) to be credited to their SGL account and the CSGL account. Delivery in physical form from the main SGL account is permissible at the instance of the investor subsequently.
7. It will be the responsibility of the bank or the PD to pass on the securities to their clients. Except in extraordinary circumstances, the transfer of securities to the clients shall be completed within,/ive working days from the date of issue.
8. The bank or PD can recover upto six paise per Rs. 100 as brokerage/commission/service charges for rendering this service to their clients. Such costs may be built into the sale price or recovered separately from the clients. In case the transfer of securities is effected subsequent to the issue date of the security, the consideration amount payable by the client to the bank or PD would also include accrued interest from the date of issue.
9. Modalities for obtaining payment from clients towards cost of the securities, accrued interest wherever applicable and brokerage/commission/service charges may be worked out by the bank or PD as per agreement with the client. It may be noted that no other costs such as funding costs should be built into the price or recovered from the client.
V. Banks and PDs will be required to furnish information relating to operations under the Scheme to the Reserve Bank of India (Bank) as may be called, for from time to time within the time frame prescribed by the Bank.
VI. The aforesaid guidelines are subject to review by the Bank and accordingly, if and when considered necessary, the Scheme will be modified.