NSE ALERT! Non-competitive bidding (NCB): Know what it is, bidding amount, eligibility and other details

To encourage retail investors to invest in Government Securities (G-sec), State Development Loans (SDL) and Treasury Bills (T-Bills), the facility of non-competitive bidding (NCB) has been introduced. Under the scheme, eligible retail investors can apply for a certain amount of securities in an auction without mentioning price/yield. Such bidders are allotted securities at the weighted average price/yield of the auction.

NSE India informed about the same via a tweet. "Under non-competitive bidding, what is the minimum/maximum bidding amount? The minimum amount for bidding will be Rs 10,000 (face value) and in multiples of Rs 10,000. The maximum amount for a single non-competitive bid only for the auctions of GOI dated securities should not exceed Rs 2,00,00,000 (face value) per security per auction," it said.

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Here is all you need to know about Non-Competitive Bidding in G-Sec, SDL and T-bill:

G-sec, SDL and T-Bills are issued in the primary market through auctions conducted by Reserve Bank of India (RBI). An investor, depending upon eligibility, may bid in an auction under Competitive Bidding or Non-Competitive Bidding (NCB).

To encourage retail investors to invest in G-sec, SDL and T-Bills, the facility of non-competitive bidding (NCB) has been introduced. Under the scheme, eligible retail investors can apply for a certain amount of securities in an auction without mentioning price/yield. pic.twitter.com/RioBDuDL07

— NSEIndia (@NSEIndia) July 15, 2021

Institutional investors such as banks, financial institutions, primary dealers, mutual funds, and insurance companies are generally eligible to make competitive bids.

RBI conducts auction usually every week to issue G-sec, SDL and T-Bills. The details of upcoming auction are made available by NSE. NSE acts as facilitator in NCB to aggregate the bids received from the retail investors and submits a single bid to RBI. 

NSE has been offering G-sec and T-bills issued by central government from April 2018 to facilitate retail participation in these securities. Going forward, SDLs will also be offered to retail investors through this facility.

Retail investors can place their bids through trading members of NSE or using the NSE goBID mobile app/web platform.