Search the Internet          Tips  Sites: Finance, Investment

RBI to allow retails bids in G-Sec auctions

The Reserve Bank of India, in a bid to add depth to the gilts markets, said on Sunday that it would allow retail investors to bid in government securities.

A RBI statement said this would be allowed under the non-competitive bidding category, which paves the way for individuals, firms, companies, corporate bodies, provident funds and trusts to bid in government securities.

It said the non-competitive bidding facility in government securities auctions would be open to investors who do not maintain a current account or a subsidiary general account with the central bank.

The statement said the facility to put in non-competitive bids would be available to retail investors through banks and primary dealers.

The facility will also be open to retail investors who can make a single bid for an amount not exceeding Rs 10 million of face value per auction, the statement said.

It said regional rural banks, urban co-operative banks and non-banking financial companies will also be able to participate on a non-competitive basis as an exception in view of their statutory obligations.

"All retail investors taken together will be allocated securities under this facility up to a maximum of five per cent of the notified amount," the statement said.

The allocation on a non-competitive basis would be done at the weighted average rate that emerged in an auction on the basis of competitive bidding, it added.

Tell us what you think of this report