RBI to auction 3 govt securities worth ₹34,000 crore on April 20

The Reserve Bank of India (RBI) on Wednesday announced the sale of three government-dated securities worth ₹34,000 crore. The central bank will auction government’s treasury bills - 91-day, 182-day and 364-day tenors - through the RBI’s Core Banking Solution (E-Kuber) system on April 20. The government issues securities in order to borrow money from the market.

As per the release, the auction will be conducted using multiple-price method, which means successful bids will get accepted at their respective quoted price for the security.

It said that both competitive and non-competitive bids for the auction should be submitted in electronic format on the RBI’ E-Kuber system on April 20.

“Bids for the auction should be submitted in electronic format on the Reserve Bank of India’s Core Banking Solution (E-Kuber) system on Wednesday, April 20, 2022,” the release stated.

"The result will be announced on the same day and payment by successful bidders will have to be made on April 21," the RBI said.

The release mentioned that state governments, union territories with legislature, eligible provident funds in India, designated foreign central banks and any person or institution specified by the bank in this regard, can participate on non-competitive basis, the allocation for which will be outside the notified amount.

Individual investor can also participate on “non-competitive” basis as retail investors. “For retail investors, the allocation will be restricted to a maximum of 5% of the notified amount. Individual investors can also place bids as per the non-competitive scheme through retail direct portal,” it said.

In November last year, the RBI had launched retail direct scheme to allow retail investors to invest in government securities to channelise the savings of the middle class, small businessmen and senior citizens directly into risk-free government securities (G-Secs). Under this scheme, individual retail investors can open a gilt securities account – “Retail Direct Gilt (RDG)” account with the RBI and can buy and sell government securities through the online portal.

The RBI conducts auctions usually every Wednesday to issue T-bills of 91-day, 182-day and 364-day tenors. Settlement for the T-bills auctioned is made on T+1 day i.e. on the working day following the trade day.