AMN
The Reserve Bank has announced the indicative calendar for issuance of Sovereign Green Bonds. Accordingly, two auctions will be conducted for an amount of eight thousand crore rupees each. The first auction will be held on 25th of this month while the second has been scheduled for 9th February.
RBI has informed that five percent of the notified amount will be reserved for retail investors. Investors will have a choice to put in their money for either five years or ten years. The bonds will also be eligible for trading in secondary markets.
It may be recalled that the Union Government had announced Sovereign Green Bonds as part of its overall market borrowings in the Budget 2022-23. The proceeds will be deployed in public sector projects which help in reducing the carbon intensity of the economy and for mobilising resources for green infrastructure.
The features of the SGrB issuance will be as under:
- Issuance Method: SGrBs will be issued through Uniform Price Auction.
- Non-competitive bidding facility: Five per cent of the notified amount of sale will be reserved for retail investors as specified under the ‘Scheme for Non-competitive Bidding Facility in the auction of Government of India Dated Securities and Treasury Bills’.
- Eligibility for Repurchase Transactions (Repo): SGrBs will be eligible for Repurchase Transactions (Repo) as per the terms and conditions mentioned in Repurchase Transactions (Repo) (Reserve Bank) Directions, 2018 as amended from time to time.
- Eligibility for Statutory Liquidity Ratio (SLR): SGrBs will be reckoned as eligible investment for SLR purpose.
- Underwriting: The underwriting in the auction of SGrBs by the Primary Dealers will be as per the “Revised Scheme of Underwriting Commitment and Liquidity Support” issued by the Reserve Bank vide circular No.RBI/2007-08/186 dated November 14, 2007, as amended from time to time.
- When-issued Trading: SGrBs will be eligible for “When Issued” trading in accordance with the guidelines on ‘Transactions in the When Issued market in Central Government Securities’ issued by the Reserve Bank of India vide circular No. RBI/2018-19/25 dated July 24, 2018, as amended from time to time.
- Tradability: SGrBs will be eligible for trading in the secondary market.
- Investment by Non-residents: SGrBs will be designated as specified securities under the ‘Fully Accessible Route’ for investment in Government Securities by non-residents.
4. The calendar is subject to change, if circumstances so warrant, including for reasons such as intervening holidays. Such changes shall be communicated through Press Releases.
5. The auction of SGrBs will be subject to the terms and conditions specified in the General Notification No. F.4(2)-W&M/2018 dated March 27, 2018 issued by the Government of India, as amended from time to time.