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  • Understanding G-Sec: Types, Issuance Process & Auction Mechanism

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    benboys
    74 tayangan10 halaman
    Government security (G-sec) means a security created and issued by the Government for the purpose of raising a public loan. RBI issues an indicative half-yearly auction calendar which contains information about the amount of borrowing, the tenure of security and the likely period during which auctions will be held. Government securities are issued through auctions conducted by the RBI.

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    Government security (G-sec) means a security created and issued by the Government for the purpose of raising a public loan. RBI issues an indicative half-yearly auction calendar which contains information about the amount of borrowing, the tenure of security and the likely period during which auctions will be held. Government securities are issued through auctions conducted by the RBI.

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    74 tayangan10 halaman

    Understanding G-Sec: Types, Issuance Process & Auction Mechanism

    Diunggah oleh

    benboys
    Government security (G-sec) means a security created and issued by the Government for the purpose of raising a public loan. RBI issues an indicative half-yearly auction calendar which contains information about the amount of borrowing, the tenure of security and the likely period during which auctions will be held. Government securities are issued through auctions conducted by the RBI.

    Hak Cipta:

    Attribution Non-Commercial (BY-NC)
    Unduh sebagai PPTX, PDF, TXT atau baca online dari Scribd
    Tandai sebagai konten tidak pantas
    dari 10

    What is G-sec. Why is it issued. Different types of G-sec.

    Who issues G-sec.


    Procedure of issuing G-sec. Types of auctions.

    What is G-sec.
    Government security (G-Sec) means a security

    created and issued by the Government for the purpose of raising a public loan. Why is it issued.
    It acknowledges the Governments debt obligation,

    to meet the expenditure requirements.

    Types of G-sec
    Short term securities

    eg: treasury bills, with original maturities of less than one year.
    Long term securities

    eg: usually called Government bonds or dated securities with original maturity of one year or more.

    In India, the Central Government issues both, treasury bills and bonds or dated securities while the State Governments issues only bonds or dated securities, which are called (SDLs) State Development Loans.

    Who issues the securities.. A Government security is issued by the Central Government or the State Governments, and is a tradable instrument RBI, in consultation with the Government of India, issues an indicative half-yearly auction calendar which contains information about the amount of borrowing, the tenure of security and the likely period during which auctions will be held.
    5

    RBI places the notification and a Press Release on its website (www.rbi.org.in) and also issues an advertisement in leading English and Hindi newspapers.

    Procedure Government securities are issued through auctions conducted by the RBI.
    Auctions are conducted on the electronic platform called the NDS Auction platform. Commercial banks, scheduled urban co-op banks, insurance companies and provident funds, who maintain funds account (current account) and securities accounts (SGL account) with RBI, are members of this electronic platform.
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    Types of Auctions

    Yield based auctions.


    Price based auctions.

    A yield based auction is generally conducted when a new Government security is issued. Investors bid in yield terms up to two decimal places. Bids are arranged in ascending order and the cut-off yield is arrived at the yield corresponding to the notified amount of the auction. The cut-off yield is taken as the coupon rate for the security.
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    A price based auction is conducted when Government of India re-issues securities issued earlier. Bidders quote in terms of price per Rs.100 of face value of the security (e.g., Rs.102.00, Rs.101.00 etc. Bids are arranged in descending order and the successful bidders are those who have bid at or above the cut-off price.
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