RBI/2007-2008/186
IDMD.PDRS.No. 2382/03.64.00/2007-08

November 14, 2007

All Primary Dealers in the Government Securities Market and
scheduled commercial banks undertaking PD business departmentally

Please refer to our circular IDMC.No.3007/03.64.00/2005-06 dated April 4, 2006 on the Scheme for Underwriting Commitment.

2. In terms of the aforesaid Scheme, the Reserve Bank of India announces the Minimum Underwriting Commitment (MUC) for each PD and the amount for which Additional Competitive Underwriting (ACU) auction will be held. Each PD is required to bid for a minimum of three percent of the notified amount in the ACU auction.

3. The Scheme has been reviewed and it has been decided that the minimum bidding requirement for each PD in the ACU auction would henceforth be equal to the amount of MUC. An illustration of the revised minimum commitment for PDs in the ACU auction is enclosed in the Annex.

4. The basis for payment of underwriting commission and other terms and conditions of the underwriting scheme would, however, remain unchanged.

Yours faithfully

(K.V. Rajan)
Chief General Manager

Annex

Illustration of the change in minimum bidding commitment of Primary dealers in the
Additional Competitive Underwriting auction