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 RBI/2007-08/186/IDMD.PDRS.No.
2382/03.64.00/2007-08 dated November 14, 2007 on the captioned
subject.
2. We have since received a few queries about the change in the
minimum bidding requirement in the Additional Competitive
Underwriting auction. The bidding requirement as per the revised
circular has been further amplified in the Annex for the benefit
of market participants.
3. All other terms and conditions of the underwriting scheme
remain unchanged.
Yours faithfully
(R.N. Kar)
General Manager
ANNEX
(Annex to RBI Circular No:
RBI/2007-08/202 IDMD.PDRS.No.2720/03.64.00/2007-08 dated
November 30, 2007)
Illustration of the change in minimum
bidding commitment of Primary Dealers in the Additional
Competitive Underwriting auction
Sr. No.
Underwriting components
Basis of computation
Present Method
Revised Method
(Amount in Rs.
crore)
Notified Amount
5000
5000
1
No. of PDs
19
19
2
Minimum
Underwriting Commitment (MUC) for all PDs collectively
(Notified Amount
/ 2)
2500
2500
3
Each PD's share
under MUC
(Sr.No.2 / Sr.
No.1)
131.58
131.58
4
Rounded off to
next higher integer
132
132
5
Total PD
commitment under MUC collectively
(Sr. No. 4 x Sr.
No. 1)
2508
2508
6
Balance under ACU
(Total notified
amount minus MUC)
2492
2492
7
Minimum bidding
commitment for each PD under ACU
3 per cent of
notified amount under present method and an amount equal to
MUC under revised method
150
132
8
Total commitment
under ACU for all PDs collectively
(Sr. No. 7 x Sr.
No.1)
2850
2508
9
Total
underwriting commitment for each PD under MUC and ACU
