Ref.No.IDMC.4840 /08.02.29.01/2000-01

May 25, 2001

To,

All Scheduled Commercial Banks excluding RRBs/
All State Co-operative Banks/ All Scheduled
Primary(Urban)Co-operative Banks/All Financial
Institutions/ All Primary & Satellite Dealers.

Dear Sirs,

Sale of Government of India Dated Securities by Auction

Government of India have offered to sell, vide notifications No.4(7)-W&M/2001 and No.4(7)–W&M/2001(i) both dated May 25, 2001 (copy enclosed), two new dated securities of 12-year and 20-year tenures, for notified amounts of Rs.3,000 crore (nominal) and Rs 2,000 crore (nominal) respectively, through yield based auctions by Reserve Bank of India. The auctions will be conducted at Mumbai on Tuesday, May 29, 2001. The salient features of the auctions and the terms and conditions governing the issue of the Stocks are given in the notifications, which should be read along with the General Notification F.No.4(2)-W&M/97 issued by Government on April 1, 1997 (c.f. our letter IDMC.No.3254/08.08.20/96-97 dated April 1, 1997) as amended by Government Notification No.4(7)-W&M/99 dated 5th April, 1999. We wish to draw your attention in particular, to the following:

1. The Stocks will be issued for a minimum amount of Rs.10,000/- (nominal) and in multiples of Rs.10,000/- thereafter.
2. The bids should be submitted in the prescribed form of application given in Annexure before 2.30 p.m. on May 29, 2001 in sealed covers superscribed "Tender for 12-Year Government Stock - Auction dated May 29, 2001" or "Tender for 20-Year Government Stock - Auction dated May 29, 2001" (as the case may be) and deposited in the appropriate tender box kept for the purpose at Reserve Bank of India, Fort, Mumbai. The yield per cent per annum expected by the bidder should be expressed upto two decimal points.
3. An investor can submit more than one bid at different yields but a separate application should be submitted for each bid. The aggregate amount of bids submitted by a person should not exceed the notified amount in each auction.
4. On the basis of bids received, the Reserve Bank will determine in each auction, the maximum rate of yield i.e. the coupon rate, upto which tenders for purchase of Government Stock will be accepted at each auction. All such bids offered at the maximum rate of yield, as determined by the Reserve Bank of India, will be accepted at par. Other bids tendered at lower than the maximum rate of yield determined by the Reserve Bank of India will be accepted at the rate quoted in the bid. Bids quoted at rates higher than the maximum rate of yield determined by the Reserve Bank of India will be rejected. Reserve Bank of India will have full discretion to accept or reject any or all bids either wholly or partially without assigning any reason.
5. The results of the auctions will be displayed at Reserve Bank of India, Fort, Mumbai on May 29, 2001. Successful bidders will be required to deposit with the Reserve Bank of India, Public Debt Office, Fort, Mumbai, the amount payable for the Government Stock allotted to them in cash or by cheque on their account with Reserve Bank of India, Mumbai or by Banker's pay order, along with a covering letter on May 30, 2001 before 2.30 p.m. In case of holders of Current account with RBI, the amount payable will be debited to their respective Current accounts maintained with the Reserve Bank of India.
6. The Government Stock will be issued by credit to Subsidiary General Ledger Account (SGL) of parties maintaining such account with Reserve Bank of India or in the form of Stock Certificate. Interest on the Government Stocks will be paid half-yearly i.e. on November 30 and May 30.
7. The 12-year Government Stock will be repaid at par on May 30, 2013 and the 20-year Government Stock will be repaid at par on May 30, 2021.

2. The new Stocks will qualify for the Ready-forward facility.

 

Yours faithfully,

Sd/-

(A.S.Rao)
General Manager

Encl.: 3 Sheets

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(Department of Economic Affairs)
(Budget Division)

New Delhi, the May 25, 2001

NOTIFICATION

Auction for Sale of Government Stock of 12 Years

No 4(7)-W&M/2001: Government of India hereby notifies sale of Government Stock (securities) of 12-Year tenure for an aggregate amount of Rs. 3,000 crore (nominal). The sale will be subject to the terms and conditions spelt out in this notification (called ‘Specific Notification’) as also the terms and conditions specified in the General Notification F.No.4(2)-W&M/97, dated 1^st April,1997 issued by Government of India as amended by Notification F.No.4(7)-W&M/99, dated 5^th April,1999.

Method of Issue

2. The Government Stock will be sold through the Reserve Bank of India, Fort, Mumbai - 400 001 in the manner prescribed in Paragraph 5.1 of the General Notification No. 4(2) - W &M/97, dated 1^st April,1997 and at a coupon rate to be determined by the Reserve Bank of India at the auction.

Place and Date of Auction

3. The auction will be conducted by the Reserve Bank of India, Fort, Mumbai - 400 001 on May 29, 2001. The application form duly filled in with the bids should be submitted to the aforesaid office on May 29, 2001 before the close of banking hours.

Tenure

4. The Stock will be of twelve years tenure. The tenure of Government Stock will commence from May 30, 2001. The stock will be repaid at par on May 30, 2013.

Date of issue and payment for the stock

5. The result of the auction shall be displayed by the Reserve Bank of India at its Fort, Mumbai Office on May 29, 2001. The payment by successful bidders will be on May 30, 2001 i.e. the date of issue.

Interest

6. 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 paid half-yearly on November 30 and May 30.

By Order of the President of India

Sd/-

(D. Swarup)
Joint Secretary (Budget)

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(Department of Economic Affairs)
(Budget Division)

New Delhi, the May 25, 2001

NOTIFICATION

Auction for Sale of Government Stock of 20 Years

No 4(7)-W&M/2001(1): Government of India hereby notifies sale of Government Stock (securities) of 20-Year tenure for an aggregate amount of Rs. 2,000 crore (nominal). The sale will be subject to the terms and conditions spelt out in this notification (called ‘Specific Notification’) as also the terms and conditions specified in the General Notification F.No.4(2)-W&M/97, dated 1^st April,1997 issued by Government of India as amended by Notification F.No.4(7)-W&M/99, dated 5^th April,1999.

Method of Issue

2. The Government Stock will be sold through the Reserve Bank of India, Fort, Mumbai - 400 001 in the manner prescribed in Paragraph 5.1 of the General Notification No. 4(2) - W &M/97, dated 1^st April,1997 and at a coupon rate to be determined by the Reserve Bank of India at the auction.

Place and Date of Auction

3. The auction will be conducted by the Reserve Bank of India, Fort, Mumbai - 400 001 on May 29, 2001. The application form duly filled in with the bids should be submitted to the aforesaid office on May 29, 2001 before the close of banking hours.

Tenure

4. The Stock will be of twenty years tenure. The tenure of Government Stock will commence from May 30, 2001. The stock will be repaid at par on May 30, 2021.

Date of issue and payment for the stock

5. The result of the auction shall be displayed by the Reserve Bank of India at its Fort, Mumbai Office on May 29,2001. The payment by successful bidders will be on May 30, 2001 i.e. the date of issue.

Interest

6. 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 paid half-yearly on November 30 and May 30.

By Order of the President of India

Sd/-

(D. Swarup)
Joint Secretary (Budget)