RBI/2007-2008/186
IDMD.PDRS.No. 2382/03.64.00/2007-08
November 14,
2007
All Primary
Dealers in the Government Securities Market and
scheduled commercial banks undertaking PD business departmentally
Revised Scheme
of Underwriting Commitment and Liquidity Support
Please refer to
our circular IDMC.No.3007/03.64.00/2005-06 dated April 4, 2006 on
the Scheme for Underwriting Commitment.
2. In terms of
the aforesaid Scheme, the Reserve Bank of India announces the
Minimum Underwriting Commitment (MUC) for each PD and the amount
for which Additional Competitive Underwriting (ACU) auction will
be held. Each PD is required to bid for a minimum of three percent
of the notified amount in the ACU auction.
3. The Scheme
has been reviewed and it has been decided that the minimum bidding
requirement for each PD in the ACU auction would henceforth be
equal to the amount of MUC. An illustration of the revised minimum
commitment for PDs in the ACU auction is enclosed in the
Annex.
4. The basis
for payment of underwriting commission and other terms and
conditions of the underwriting scheme would, however, remain
unchanged.
Yours
faithfully
(K.V. Rajan)
Chief General Manager
Annex
Illustration of the change in minimum bidding commitment of
Primary dealers in the
Additional Competitive Underwriting auction
|
Sl. No. |
Name |
Basis |
Present
Method |
Revised
Method |
|
(Amount
in Rs crore) |
|
|
Notified
Amount |
|
5000 |
5000 |
|
1 |
No. of
PDs |
|
19 |
19 |
|
2 |
Minimum
Underwriting Commitment |
5000/2 |
2500 |
2500 |
|
3 |
PD's
share under MUC |
2500/19 |
131.58 |
131.58 |
|
4 |
Rounded
off to |
|
132 |
132 |
|
5 |
Total PD
commitment under MUC |
132x19 |
2508 |
2508 |
|
6 |
Balance
under AUC |
Total
notified
amount minus
MUC |
2492 |
2492 |
|
7 |
Minimum
bid from each
PD under AUC |
3 per
cent of
notified amount |
150 |
132 |
|
8 |
Total
commitment under ACU
for each PD |
(Sr. No.
4+
Sr. No. 7) |
282 |
264 |
|
9 |
Total
commitment under ACU
for all PDs |
(Sr No. 7
x
Sr. No.1) |
2850 |
2508 |
|
10 |
Total
Underwriting (5+9) |
|
5358 |
5016 |
