By Anil Varma, Bloomberg
Mumbai: The Reserve Bank of India (RBI) said each primary dealer must underwrite a minimum of Rs1.39 billion ($34.3 million) at the 25 May sale of the 7.38% government bond maturing on 2015.
The RBI set Rs840 million as the minimum underwriting commitment at the sale of the 8.35% note maturing in 2022.
Bidding by all primary dealers together will be Rs24.98 billion for the 2015 bonds and Rs14.88 billion for the 15-year note. The auction to determine the fee for primary dealers to underwrite the bonds will be held on 24 May.
Primary dealers, companies that trade directly with RBI , underwrite government bond issues and get a commission based on the bids they make.
The government plans to sell Rs50 billion of the eight-year bonds and Rs30 billion of the 2022 bonds at the auction on 25 May, the fourth under its Rs1.55 trillion borrowing program for the fiscal year that began on 1 April.