Ref.No.IDMD 1846/08.02.032/2012-13

December 17, 2012

All Scheduled Commercial Banks/All State Co-operative Banks/All Scheduled Primary

(Urban) Co-operative Banks /All Financial Institutions/All Primary Dealers

Dear Sir/Madam,

Government of India have offered to sell (re-issue)

(a) ‘8.07 percent Government Stock 2017-JUL’ for a notified amount of Rs.3,000 crore (nominal) through a price based auction using uniform price method vide Notification No.4(5)-W&M/2012 dated December 17, 2012;

(b) ‘8.15 percent Government Stock 2022’ for a notified amount of Rs.6,000 crore (nominal) through a price based auction using uniform price method vide Notification No.4(5)-W&M/2012(i) dated December 17, 2012; and

(c) ‘8.97 percent Government Stock 2030’ for a notified amount of Rs. 3,000 crore (nominal) through a price based auction using uniform price method vide Notification No.4(5)-W&M/2012(ii) dated December 17, 2012. The Reserve Bank of India at Mumbai will conduct the auctions on December 21, 2012. The salient features of the auctions and the terms and conditions governing the issue of the Stocks are given in the Notifications (copies enclosed), which should be read along with the General Notification F. No. 4 (13)–W&M/2008, dated October 8, 2008 issued by Government of India.

2. We wish to draw your attention, in particular, to the following:

i. The Stocks will be issued for a minimum amount of Rs.10,000/- (nominal) and in multiples of Rs.10,000/- thereafter.

ii. In all the auctions, Government Stock up to 5% of the notified amount of sale will be allotted to the eligible individuals and institutions under the Scheme for Non-competitive Bidding Facility in the Auctions of Government Securities [(enclosed with the notifications F. No.4 (5)-W&M/2012, F. No.4 (5)-W&M/2012(i) and F. No.4 (5)-W&M/2012(ii) all dated December 17, 2012 )]. Each bank or PD on the basis of firm orders received from their constituents will submit a single consolidated non-competitive bid on behalf of all its constituents in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system. Allotment under the non-competitive segment to the bank or PD will be at the weighted average rate of yield/price that will emerge in the auction on the basis of the competitive bidding.

iii. Both competitive and non-competitive bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system on December 21, 2012. Bids in physical form will not be accepted except in extraordinary circumstances such as general failure of the Reserve Bank of India Core Banking Solution (E-Kuber) system. The non-competitive bids should be submitted between 10.30 a.m. and 11.30 a.m. and the competitive bids should be submitted between 10.30 a.m. and 12.00 noon.

iv. An investor can submit more than one competitive bid at different prices in electronic format on Reserve Bank of India Core Banking Solution (E-Kuber) system. However, the aggregate amount of bids submitted by a person in an auction should not exceed the notified amount of auction.

v. On the basis of bids received, the Reserve Bank will determine the minimum price up to which tenders for purchase of Government Stock will be accepted at the auctions. Bids quoted at rates lower than the minimum price determined by the Reserve Bank of India will be rejected. Reserve Bank of India will have the full discretion to accept or reject any or all bids either wholly or partially without assigning any reason.

vi. The result of the auctions will be announced on December 21, 2012 and payment by successful bidders will be on December 24, 2012 (Monday).

vii. The Government Stocks will be issued by credit to Subsidiary General Ledger Account (SGL) of parties maintaining such account with Reserve Bank of India or in the form of Stock Certificate. Interest on the Government Stock will be paid half-yearly.

viii. The Government Stocks will be repaid at par on July 03, 2017; June 11, 2022 and December 05, 2030.

ix. The Stocks will qualify for the ready forward facility.

x. The Stock will be eligible for “When Issued” trading during the period December 18 – December 21, 2012 in accordance with the guidelines on ‘When Issued’ transactions in Central Government Securities’ issued by the Reserve Bank of India vide circular No. RBI /2006-07/178 dated November 16, 2006 as amended from time to time.

Yours faithfully

(Rajendra Kumar)

Deputy General Manager

Encls: As above

Government securities auction: uniform-price sale with reserved non-competitive allocation and electronic bidding via e-Kuber system. Price-based auctions for re-issue of Government dated securities will be conducted using the uniform price method with specified notified amounts. Issues are in prescribed minimum nominal lots; multiple competitive bids per investor are permitted within aggregate limits. A reserved portion of each issue is available under a non-competitive bidding facility, with consolidated non-competitive bids submitted by banks/PDs and allotment at the weighted average yield/price from competitive bids. All bids must be submitted electronically via the RBI E-Kuber system within stipulated time windows; RBI will set a minimum acceptable price and may accept or reject bids wholly or partially.