Buying G-securities at an auction? Here are 4 things that you should know
Buying G-securities at an auction? Here are 4 things that you should know
The government, in order to finance its expenses, regularly issues bonds through auctions announced by the RBI. These are called G-secs and, typically, these are bonds that pay interest and have maturities ranging from two to 30 years.
About 5 per cent of the auction amount is reserved for non-competitive bidders, including individuals, who can apply for and buy these bonds. G-secs come with a sovereign guarantee and the payable interest, which is taxable, is determined at the auction.
Eligibility:
Individuals, NRIs, PIOs, HUFs, societies, associations, trusts and other such bodies can apply for G-secs as non-competitive bidders.
Account:
To buy G-secs, an investor must open a constituent security general ledger (CSGL) account with his bank or have a demat account. G-secs have to be bought through banks that submit the investor's bid to the RBI. The payment is made through the bank account and securities are credited to the demat account or held in the CSGL account electronically.
Form:
The application for buying G-secs is made available by the bank. Since the bid is non-competitive, the investor is not expected to bid for a price or yield as is the case for competitive bidding.
Allotment:
The allotment is on a pro rata basis depending on the amount that was bid on a non-competitive basis. The price offered is the weighted average of successful bids. The bank notifies the investor about the actual allotment after the auction.
Points to note
> Investors can make only a single bid per auction and need to give an undertaking to this effect.
> Investors cannot apply for more than Rs 1 crore per auction. The minimum investment amount is Rs 10,000, and in multiples of Rs 10,000 thereafter
G-secs come with a sovereign guarantee and the payable interest, which is taxable, is determined at the auction.
Source : Economics Times
Thanking you
Regards,
Rajesh Kumar Kathpalia ¤ SMC Global
17,Netaji Subhash Marg,Daryaganj,
New Delhi-110002 Mobile No 9891645052
Email Id: rajesh.ipo@smcindiaonline.com
--
You received this message because you are subscribed to the Google Groups "Product Updates for AMC" group.
To unsubscribe from this group and stop receiving emails from it, send an email to Productupdatesforamc+unsubscribe@googlegroups.com.
For more options, visit https://groups.google.com/groups/opt_out.
The government, in order to finance its expenses, regularly issues bonds through auctions announced by the RBI. These are called G-secs and, typically, these are bonds that pay interest and have maturities ranging from two to 30 years.
About 5 per cent of the auction amount is reserved for non-competitive bidders, including individuals, who can apply for and buy these bonds. G-secs come with a sovereign guarantee and the payable interest, which is taxable, is determined at the auction.
Eligibility:
Individuals, NRIs, PIOs, HUFs, societies, associations, trusts and other such bodies can apply for G-secs as non-competitive bidders.
Account:
To buy G-secs, an investor must open a constituent security general ledger (CSGL) account with his bank or have a demat account. G-secs have to be bought through banks that submit the investor's bid to the RBI. The payment is made through the bank account and securities are credited to the demat account or held in the CSGL account electronically.
Form:
The application for buying G-secs is made available by the bank. Since the bid is non-competitive, the investor is not expected to bid for a price or yield as is the case for competitive bidding.
Allotment:
The allotment is on a pro rata basis depending on the amount that was bid on a non-competitive basis. The price offered is the weighted average of successful bids. The bank notifies the investor about the actual allotment after the auction.
Points to note
> Investors can make only a single bid per auction and need to give an undertaking to this effect.
> Investors cannot apply for more than Rs 1 crore per auction. The minimum investment amount is Rs 10,000, and in multiples of Rs 10,000 thereafter
G-secs come with a sovereign guarantee and the payable interest, which is taxable, is determined at the auction.
Source : Economics Times
Thanking you
Regards,
Rajesh Kumar Kathpalia ¤ SMC Global
17,Netaji Subhash Marg,Daryaganj,
New Delhi-110002 Mobile No 9891645052
Email Id: rajesh.ipo@smcindiaonline.com
--
You received this message because you are subscribed to the Google Groups "Product Updates for AMC" group.
To unsubscribe from this group and stop receiving emails from it, send an email to Productupdatesforamc+unsubscribe@googlegroups.com.
For more options, visit https://groups.google.com/groups/opt_out.
Comments
Post a Comment
You are requested to mentioned your full name with email id while commenting.