Terms and Conditions for Fortnightly Repo Auctions

Notification Marquee

ਪ੍ਰਕਾਸ਼ਿਤ ਤਾਰੀਖ ਨਵੰਬਰ 03, 2001

ਸੁਣੋ

Auctions for Repo on "multiple price" basis will be conducted by Reserve Bank of India at Mumbai as per the dates given in the 'Calendar for Fortnightly Repo Auctions under LAF'

All transferable Government of India dated securities and Treasury Bills will be the eligible securities for Repo auctions.

Bids will be received for a minimum amount of Rs.5 crore and in multiples of Rs.5 crore thereafter.

All Scheduled Commercial Banks (excluding RRBs) and Primary Dealers (PDs) maintaining SGL and Current accounts with RBI at Mumbai will be eligible to participate in the Repo auctions.

Bids should be submitted in the prescribed form on the date of auction in sealed covers indicating "Fortnightly Repo Auction" on the top of the envelope addressed to the Chief General Manager, Internal Debt Management Cell, 16^th Floor, Reserve Bank of India, Central Office, Mumbai-400 001 and deposited in the box kept at the Reception on the Ground Floor of the Central Office building, RBI, for the purpose, before 10.30.a.m.

Single or Multiple bids at different rates are permissible; separate tender form should be submitted for each bid.

The Repo rate in per cent per annum expected by the tenderer should be expressed up to two decimal points rounded off to the nearest 5 basis points.

The Repo will be conducted as ‘Hold-in-Custody’ type of Repo. A constituents’ SGL Account called "Repo Constituents’ SGL Account" will be opened with Reserve Bank of India as a custodial account. Securities will be held by RBI on behalf of the participants in this account in all Repo operations. RBI would hold Government Securities sold by the Bank under Repo in the constituents’ account (Repo Constituents’ SGL Account) on behalf of the counter parties during the repo period.

For the purpose of Hold-in-Custody Repos, the applicants will have to authorise RBI to transfer securities to/from custodial accounts by crediting /debiting their accounts based on their application/bid form. They will also have to authorise RBI to provide for cash flow adjustments and for transferring coupons to RBI. All banks/PDs will have to authorise the RBI to accordingly credit/debit their current accounts and Repo Constituents’ SGL Accounts as the case may be. Accrued interest on the security will be ignored for the pricing of the security. Coupon, if any, will be transferred to the RBI in the case of Repos.

On the basis of the tenders received, RBI will determine the cut-off rate up to which bids will be accepted.

There will be margins for the Government of India dated securities and eligible Treasury Bills and the amount of securities to be offered or tendered on acceptance of a bid for Rs.100 will be Rs.105 in terms of face value.

The successful tenderer’s Current Account with RBI will be debited as per the current procedure under Repo facility. The tenderer’s Repo Constituents’ SGL Account will be credited simultaneously. On the expiry of the Repo period, the tenderer’s Constituent SGL Account will be debited and Current Account credited as per the date, amount and rate of interest indicated as the case may be. For instance, in a Repo auction where bid amount accepted is Rs.420 crore at a cut off rate of 6.25 per cent the calculations of amount of cash outflow in the first leg and amount of cash inflow in the second leg (with interest) will be as under.

Leg 1: Tenderer’s Current Account Dr. Rs. 420 Cr.

Tenderer’s RC SGL Account Cr. Rs. 441 Cr = (Amt.of bid x 105) /100.

Leg 2: Tenderer’s RC SGL Account Dr. Rs. 441 Cr

Tenderer’s Current Account Cr. Rs 421,00,68,493 = (Amt. of bid + interest for 14 day at 6.25%)

Securities held by Reserve Bank of India on behalf of banks in the Repo Constituents’ SGL Account will be counted for SLR purposes. As a custodian of securities, the Securities Department of the Reserve Bank of India will issue SGL balance certificates, which would give details on total holdings of the bank and total loan-wise securities held in the Repo Constituents’ SGL Account as on any date.

The settlement of transactions in the auction will take place on the same day of the auction.

The results of the auction will be announced through the Press Relations Division by 12.00 noon and the same would also be displayed at Mumbai Office, RBI, Main Building, Fort, Mumbai 400001.

Tenderer should check for himself/herself the result of the auction and if successful, collect the acceptance cum deal confirmation advice from Securities Department, RBI, Fort, Mumbai 400001 before 2.30 p.m.

It will be binding on the successful bidders in the auction to accept the allotted amount of securities in full at the rate emerging in the auction. If the successful bidders do not honour the allotment, they will be subject to penal action to the extent of debarring from participating in the auctions for a period of one year.

The Reserve Bank reserves the right to accept or reject any or all the tenders wholly or partially, if deemed fit, without assigning any reason.

Reserve Bank of India shall not be held responsible for any loss, damage or liability on account of acting as the Custodian on behalf of the participants.