Scheme for Non-competitive Bidding Facility in the Auction of Government of India Dated Securities and Treasury Bills

• a. Retail investor is any person, including individuals, firms, companies, corporate bodies, institutions, provident funds, trusts, and any other entity as may be prescribed by RBI.
• b. ‘Aggregator/Facilitator’ means a Scheduled Bank or Primary Dealer or Specified Stock Exchange or any other entity approved by RBI, permitted to aggregate the bids received from the investors and submit a single bid in the non-competitive segment of the primary auction.
• c. ‘Specified stock exchange’ means SEBI recognized Stock Exchange, which have received No Objection
• Certificate (NOC) from SEBI to act as aggregator/facilitator in the primary auction segment.
• d. ‘Eligible Provident Funds’ are those non-government provident funds governed by the Provident Funds Act, 1925 whose investment pattern is decided by the Government of India.

• i. Regional Rural Banks (RRBs) and Cooperative Banks shall be covered under this Scheme only in the auctions of dated securities in view of their statutory obligations.
• ii. Since these banks maintain SGL account and current account with the Reserve Bank of India, they shall be eligible to submit their non-competitive bids directly.

• i. State Governments, eligible provident funds in India, the Nepal Rashtra Bank, Royal Monetary Authority of Bhutan and any Person or Institution, specified by the Bank, with the approval of Government, shall be covered under this scheme only in the auctions of Treasury Bills.
• ii. These bids will be outside the notified amount.
• iii. There will not be any restriction on the maximum amount of bid for these entities.

IV. Quantum: Allocation of non-competitive bids from retail investors will be restricted to a maximum of five percent of the aggregate nominal amount of the issue within the notified  amount as specified  by the Government of India, or any other percentage determined by Reserve Bank of India.

• a. The minimum amount for bidding will be ₹10,000 (face value) and therefore in multiples in ₹10,000 as hitherto.
• b. In the auctions of GoI dated securities, the retail investors can make a single bid for an amount not more than Rupees Two crore (face value) per security per auction.

• a. The retail investor desirous of participating in the auction under the Scheme would be required to maintain a depository account with any of the depositories or a gilt account under the constituent subsidiary general ledger (CSGL) account of Aggregator/Facilitator or ‘Retail Direct Gilt Account’ (RDG Account) with RBI.
• b. Under the Scheme, an investor can make only a single bid in an auction. An undertaking to the effect that the investor is making only a single bid will have to obtained and kept on record by the Aggregator/Facilitator.

Submission of Bids:

• c. Each Aggregator/Facilitator on the basis of firm orders received from their constituents with submit a single consolidated non-competitive bid on behalf of all its constituents in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system. Except in extraordinary circumstances such as general failure of the Reserve Bank of India Core Banking Solution (E-Kuber) system, non- competitive bid in physical form will not be accepted.

Allotment of Bids:

• d. Allotment under the non-competitive segment to the Aggregator/Facilitator will be at the weighted average rate of yield/price that will emerge in the auction on the basis of the competitive bidding. The securities will be issued to the Aggregator/Facilitator against payment on the date of issue irrespective of whether they have received payment from their clients.
• e. 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 Aggregator/Facilitator to appropriately allocate securities to their clients in a transparent manner.
• f. In case the aggregate amount of bids is less than the reserved amount, the shortfall will be taken to competitive portion.

• g. Security would be issued only in SGL form by RBI. The Aggregator/Facilitator has to clearly indicate at the time of tendering the non-competitive bids the amounts (face value) to be credited to their main SGL or CSGL account.
• h. Delivery in physical form from the Main SGL account is permissible at the instance of the investor subsequently.
• i. It will be the responsibility of the Aggregator/Facilitator to pass on the securities to their clients. Except in extraordinary circumstances, the transfer of securities to the client should b completed within five working days from the date of issue.

• j. The Aggregator/Facilitator can recover up to six paise per ` 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.
• k. In case, the securities are transferred subsequent to the issue date of the security, the consideration amount payable by the client to the Aggregator/Facilitator will include accrued interest from the date of issue.
• l. 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 Aggregator/Facilitator as per agreement with the client.
• m. It may be noted that no other costs, such as funding costs, should be built into the price or recovered from the client.