RBI Changes Bonds Auction Methodology

The change in methodology was notified by RBI on July 2, which means that in place of the multiple price method, it will use uniform pricing method.

The Reserve Bank of India (RBI) has altered its methodology for auction of bonds, under which bonds maturing between two to 14 years, will now be auctioned under the uniform price method. Subsequently, the benchmark securities of tenures measuring two-years, three-years, five-years and 10-years and 14 years as well as floating rate bonds, will now be issued on the basis of uniform price method, the RBI said in a statement. The change in methodology was notified by the central bank on July 2, which means that in place of the existing multiple price method, it will use the uniform pricing method.