G-Sec bidding — RBI asks participants to use e-Kuber facility to avoid errors

The Reserve Bank of India (RBI) has recently asked all market participants to use the “price/yield range setting” facility provided on e-Kuber — its Core Banking Solution (CBS) platform — to avoid errors while placing bids for government securities (G-Sec) auctions. The central bank's alert on avoiding errors is significant as no request for cancellation of bids will be entertained after the close of the auction window.

In the recent past there have been a few instances of fat finger, big figure errors on the part of market participants in G-Sec auctions. Realising that such errors can cause financial loss to the bidders, RBI has developed “Price/Yield range setting” facility on e-Kuber.

In December 2019 the ‘Price/Yield range setting’ facility was provided on the e-Kuber platform as a risk management measure. The facility allows a participant to define a range i.e. a maximum and a minimum value for bids they intend to submit. The range can be set in either price or yield terms, for each security, for every auction which can be set before the auction and can also be modified during the auction.