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Sale of Government of India Treasury Bills by Auction
May, 30th 2016
                                          Government of India
                                           Ministry of Finance
                                    (Department of Economic Affairs)

                                                Notification
                                                                              New Delhi, the May 26, 2016

Subject: Sale of Government of India Treasury Bills by Auction

F.No.4(8)-W&M/2015: In supersession of Government notifications No. F.4(14)-W&M/86 dated 18th
November, 1986; No. F.2(17)-W&M/92 dated Ist January, 1993; No. F.2(17)-W&M/92 dated 4th July,
1994; No. F.2(1)-W&M/97 dated 20th May, 1997; No. F.2(1)-W&M/97(i) dated 20th May, 1997; No F.
2(12)-W&M/97 dated 31st March 1998 and F.No.2(12)-W&M/97 dated 19th April 2016, the Government
of India hereby notifies the sale of "Government of India Treasury Bills" (hereinafter the "Bills") on
auction basis.

Main Features:

2.      (i) The Bills of varying maturities with a maximum tenor of upto 364 days will be sold by the
Reserve Bank of India (hereinafter called "the Bank") on auction basis. The date and place of auction,
and the exact tenor of bills will be announced by the Bank from time to time.

        (ii) The Bank will notify the nominal amounts of bills to be sold to competitive bidders from
time to time.

        (iii) The Bank may make allocations at the auctions by means of either `uniform price auction'
or `multiple price auction'. The method of auction will be announced by the Bank from time to time.

        (iv) The Bills would be issued at a discounted price.

        (v) In respect of competitive bids, the rate of discount and the corresponding issue price would
be determined at each auction. In the case of uniform price auction, competitive bids will be accepted
at the minimum discounted price called cut-off price determined at the auction, irrespective of bid
prices tendered. In the case of multiple price auction, competitive bids will be accepted upto the
minimum discounted price called `cut off' price determined at the auction, at bid prices tendered at
the auction. Competitive bids at offer prices lower than the `cut off' price will be rejected in the case
of both uniform and multiple price auctions (Illustrations in Annexure-I).

        (vi) Allocation for `non-competitive' bids will be at the discretion of the Bank. These non-
competitive bids will be outside the notified amount. Such allocation for `non-competitive' bids will be
at the weighted average price arrived at on the basis of the competitive bids accepted at the auction.

         (vii) The Bank will have the full discretion to accept or reject any or all the bids either wholly
or partially, as deemed fit by it, without assigning any reason.

        (viii) The Bank may, if it considers appropriate to do so participate in the auction as a `non-
competitor' and buy bills for part of or whole of the amount notified at the cut-off price decided in the
auction.

Eligibility for Investment:

3.      The investment in the Treasury Bills, through competitive route, may be made by any person
resident in India, including firms, companies, corporate bodies, institutions and Trusts. Non-Resident
Indians and Foreign Investors are eligible to invest subject to the approval of the Government and
provisions of Foreign Exchange Management Act, 1999 and the Regulations framed there under, in
addition to the other provisions of laws applicable to Government Securities.
                                                   -2-

4.      Eligible entities could participate on `non-competitive' basis in auctions for specified Bills as
decided by the Bank from time to time. The State Governments, eligible provident funds in India, the
Nepal Rashtra Bank and any Person or Institution, specified by the Bank, with the approval of
Government, in this regard, can participate on non-competitive basis. Individuals can also participate
on non-competitive basis as retail investors. For retail investors, the allocation will be restricted to a
maximum of 5 percentage 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.

Explanation: The allocation for individuals shall be within notified amount and for other eligible
entities outside notified amount.

Note: Eligible Provident Funds are those non-government provident funds governed by the Provident
Funds Act 1925 and Employees' Provident Fund and Misc. Provisions Act, 1952 whose investment
pattern is decided by the Government of India.

Tenders for purchase of Government of India Auction Treasury Bills:

5.      (i) Details of the procedure relating to auction for sale of the Bills will be announced by the
Bank from time to time.

          (ii) Intending investors would be required to submit their tender at the designated offices of
the Bank, as notified by it, on the day of the auction, upto the close of banking hours for the issue of
bills in the prescribed Application Form (Annexure II for investors other than State Governments and
Nepal Rastra Bank and Annexure III for State Governments and Nepal Rastra Bank).

         (iii) A competitive bidder would be eligible to submit multiple tenders at different prices in
separate forms. Applications which do not contain necessary details such as the nominal value of the
Bill and the price per ` 100/- at which the Bills are proposed to be purchased, are liable to be rejected
without reference to the applicant.

        (iv) The successful bidder/s would be required to deposit the requisite amount to the Bank by
cash/ cheque/ DD/ e-banking/ Banker's Pay Order or by authorization to debit their current Account at
Reserve Bank of India.

Note: The bidders are required to submit Cash / Cheque / DD / Banker's Pay Order, etc. in full while
submitting his application/ tender.

Minimum Subscription:




6.      Bills will be issued for a minimum amount of ` 10,000/- (Rupees Ten Thousand only) and in
multiples of ` 10,000/- on competitive basis, as well as on non-competitive basis.

Form:

7.       The Bills will be issued in the form of Promissory Note/ Credit to Subsidiary General Ledger
(S.G.L.) Account.

Transferability:

8.    The bills will be transferable in terms of the Government Securities Act, 2006 and the
Government Securities Regulations, 2007.
                                                     -3-

Repayment:

9.      The Bills will be repaid at par on the expiration of their tenor at the office of the Bank at which
they are registered.

Laws applicable in regard to the Bills:

10.     (i) The rights of all persons subscribing to or holding the Bills shall be determined in
accordance with the provisions of the Government Securities Act, 2006 and the Government Securities
Regulations 2007, read with the terms of this Notification, and such other Notifications as may be
issued from time to time by the Bank, in consultation with Government of India in this regard.

        (ii) The tax laws in India will apply for the purpose of assessing and determining the liability of
the investor or holder of the Bills.

        (iii) Any dispute in relation to the Bills shall be decided by the Courts in India.



                                                                                          (Prashant Goyal)
                                                                Joint Secretary to the Government of India
                                                                                              ANNEXURE-I
                         Illustration showing acceptance of Competitive bids on
                           `Uniform Price' and `Multiple Price' Auction methods

Let us assume that RBI has notified an amount of ` 300 crore for competitive bidders in a Treasury bill
auction and received the following bids.

Bidders                  Bid Prices               Bid Amount               Cumulative bid
                         (`)                      (` Crore)                amount (` Crore)

A                        98.50                    90                       90

B                        98.40                    60                       150

C                        98.35                    80                       230

D                        98.30                    70                       300

E                        98.20                    85                       385

F                        98.00                    30                       415

          Let us assume that the cut-off price fixed in the auction is ` 98.30. Bids upto the cut-off price
i.e. A, B, C & D will be accepted. E & F will be rejected. In the case of the `Uniform Price' auction, each
successful bidder will have to pay @ ` 98.30 irrespective of bid prices individually quoted. The total
amount payable will be (` 98.30/100x300)= ` 294.90 crore; whereas in the case of Multiple Price
Auction, each successful bidder will have to pay the bid price he had offered. The total amount
payable will be [(`98.50/100x 90) + (`98.40/100x 60) + (`98.35/100x80) + (`98.30/100x70)]= ` 295.18
crore.
                                                                                           ANNEXURE II
The Chief General Manager,
Public Accounts Department,
Reserve Bank of India
____________.

Dear Sir,

Tender for Government of India ---- day @
Treasury Bills

I/We, the undersigned, hereby offer to purchase ----- day @ treasury bills as set out below at the
auction to be held by you at your premises on --------------.

    (i) Date of Auction                                                  ______________

    (ii) Name of Tenderer!!                                                      ______________

    (iii) Address                                                        ______________

    (iv) Telephone No.                                                   ______________

    (v) SGL Account No., PAD, (______) @@ (for Treasury Bills)           ______________

    (vi) Current Account NO. at DAD, (________) @@                       ______________

    (vii) Nominal value of ____ day @ Treasury Bills                             Rs.

    (viii)   The price at which the bills are proposed to be purchased
             Per Rs. One hundred (nominal)                               #       Rs.

    (ix) Total purchase price of ____ day @ Treasury Bills               #       Rs.
                                                                                 (upto two decimals)

    (x) Form in which Treasury Bills are required credit to
           Subsidiary General Ledger Account / Scrip $

Undertaking

On your acceptance of my/our bid, I/We, agree/undertake to immediately collect the letter of
acceptance from your office. I/We undertake to deposit the requisite amount at Reserve Bank of India,
______, on the day/time, as indicated therein / I/We authorize Reserve Bank of India, _______, to
debit our Current Account for value equivalent to the offer value of accepted bid. $

I/We have read the Government notification no. ___________________ dated __________ and hereby
undertake to abide by the requirements stated therein.

*(Ist)   Signature :                     ** (Ist) Signature :

         Designation :                           Designation :


(2nd)    Signature :                     (2nd)   Signature :
      Designation :                           Designation :

         Office Stamp of the Bidder/s

@        Appropriation number to be filled in.
@@       Kindly mention the name of the office at which these accounts are maintained.
!!       If the application is on behalf of a constituent, please indicate the name of the constituent.
#        Not to be filled in by non-competitive bidders.
$        Strike out whichever is not applicable.
*        Those empowered to operate on the SGL Account with PAD.
**       Those Authorized to operate on the Current Account with DAD, RBI.
         (where applicable).


                                               NOTES
(1)      If the applicant's signature is by thumb mark, it should be witnessed by two persons. The
         full names, occupations and addresses of the witnesses should be appended to their
         signatures.
(2)      If the application is made in the name of a registered body, the undernoted documents, if
         not already registered at the Public Debt Office, should be submitted to the Public Debt
         Office along with the investment amount:-

         (i) Certificate of Incorporation/Registration in original or a copy thereof certified as true
                   by the issuing authority under his office seal.
         (ii) Certified copies of Memorandum and Articles of Association of the Rules and
                   Regulations/Bye-laws of the company/body.
         (iii) Certified copy of resolution in favour of the person/s authorized to deal in Government
                   Securities on behalf of the company/body together with his / their duly attested
                   specimen signature (s).

                                                       ------------
                                                                                             Annexure III
                                              FAX / TELEX

For:            The Chief General Manager
                Public Accounts Department
                Reserve Bank of India
                _________________

From :
                (Name)___________________
                (Designation)______________
                (Address)_________________
                _________________________




Dear Sir,

Tender for Government of India _____ @ day (Auction) Treasury Bills ______________________

I/We, the undersigned, hereby tender for purchase of ____ @ day Treasury Bills as set out below at the
auction to be held on ___________________________.

(i)      Nominal Value of _______ @ day Rs. _______
         Treasury Bills

(ii)     Form in which Treasury Bills are required Subsidiary General Ledger Account/Scrip

Undertaking

1.     On acceptance of my/our bid, I/we authorize Reserve Bank of India, Central Accounts Section,
Nagpur, to debit our current account for value equivalent to the offer value of accepted bid. $

2.      On your acceptance of my/our bid, I/We, agree / undertake to immediately collect the letter of
acceptance from your office. I/We undertake to deposit the requisite amount at Reserve Bank of India,
________, on the day/time, as indicated therein / I / We authorize Reserve Bank of India, ________, to
debit our Current Account for value equivalent to the offer value of accepted bid. $

       I/We have read the Government notification no. ____________ dated __________ and hereby
undertake to abide by them.

         (i)    Signature      : _________________
                And office stamp of the bidder/s

         (ii)   Designation     :__________________

         @ indicate the appropriate number

 
 
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