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Illustration showing the underwriting amount, cut-off rate of under - Writing fee accepted by the Reserve Bank and devolvement on PDs.

Annexure II

(Ref. Paragraph 4(iii) of the Guidelines)

RBI sells GOI security of 5-year tenure for an aggregate amount of Rs. 2000 crore (nominal) through an auction. Assuming that PDs submit bids for underwriting as stated below, the amount of underwriting fee payable and the devolvement would be as under:

(Rs. in crore)

Name of PD

Amount of underwriting offered

Cumulative figure

Underwriting fee quoted (Paise)

Cut-off rate

Underwriting amt. Accepted by RBI

Underwriting fee payable

             

A

100

100

15

-

100

0.1500

B

250

350

16

-

250

0.4000

C

350

700

17

-

350

0.5950

D

300

1000

18

-

300

0.5400

E

200

1200

19

-

200

0.3800

F

300

1500

20

20

300

0.6000

G

550

2050

21

Rejected

-

-

H

300

2350

22

Rejected

-

-

             

Total

2350

     

1500

2.6650

Setting off of successful bids in the Auction

Name of PD

Bids tendered in the auction

Bids accepted in the auction

Amount of underwriting obligation

Possible devolvement on each PD

A

100

50

100

50

B

250

200

250

50

C

350

350

350

-

D

300

250

300

50

E

200

120

200

80

F

300

260

300

40

G

150

75

-

-

H

135

95

-

-

Total

1785

1400

1500

270

         

Amount of Devolvement on PDs/Reserve Bank of India

Scenario

Amount of Devolvement

Devolvement on PDs

Devolvement
On RBI

Case I

135

135 *

0

Case II

270

270

0

Case III

500

270

230


In Case I, the amount of devolvement will be on pro-rata basis i.e. 50% of the amount of possible devolvement.

Note: -The allocation to PDs and RBI of devolvement amounts will be at the cut-off price / yield decided at the auction

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