DATED GOVERNMENT SECURITIES

What are Dated Government Securities?

Dated Government Securities (G-secs) are issued by Central Government to meet the Government’s debt obligation. These borrowings form the crux of the Central Government’s borrowing programme aimed at financing the shortfalls in fiscal balances. Since these are sovereign issuances, they carry no default risk and hence, are also referred to as risk-free gilt-edged instruments.

What is the tenor of Dated Government Securities?

These are usually long term in nature (maturities of more than one year). The tenor of dated securities generally ranges from 3 years to 50 years.

What are the key features of Dated Government Securities?

• G-Secs carry a coupon rate which is paid half-yearly and are redeemed at maturity at par value on maturity date.
• They qualify as SLR instruments and can also be placed as collaterals for market repo borrowing as well as borrowing under RBI’s Liquidity Adjustment Facility (LAF). Most of the securities can also be placed as collaterals for CBLO borrowing and Securities Guarantee Fund (SGF).
• The minimum amount in which they can be traded is ₹ 10,000.

How are the Dated Government Securities issued in primary market?

The G-Secs issuances are managed by the RBI, who on behalf of the Centre, regularly conducts G-Sec auctions every Friday. The total auction size generally ranges between ₹ 15,000 – ₹ 30,000 crore. Considering such large issuance size, they are underwritten by Primary Dealers. In the primary market, G-Secs are auctioned on an electronic platform, called the E-Kuber, the Core Banking Solution (CBS) platform of RBI. Commercial banks, Scheduled UCBs, Primary Dealers, Insurance Companies and Provident Funds, who maintain funds and securities account with RBI, are members of this electronic platform. In addition, with a view to provide retail participation, a separate scheme of Non-Competitive Bidding was introduced in 2002. In every G-Sec auction, a maximum of up to 5% of the notified amount is reserved for non-competitive bids. The size of such bids can range from  ₹ 10,000 – ₹ 2 crore for dated G-Secs.

How are the Dated Government Securities traded in secondary market?

Dated G-Secs have a very liquid and vibrant secondary market. They can be traded on NDS-OM, Over-the-counter, NDS-OM Web and Stock exchanges. Short selling too, subject to certain restrictions, is permitted.

Contact Us:

Clients interested in placing bids in Primary auctions and/or buying/selling Dated G-Sec securities may contact our Sales Personnel on 022-66202224/25/28. We endeavour to provide the best possible returns to our clients, keeping in line with their overall investment objectives.