RBI sets cut-off rate for underwriting commission in ACU auction held October 16, 2026, for a government security. Primary dealers awarded based on competitive commission rates.
RBI Sets Cut-Off Rate in Underwriting Auction
The Reserve Bank of India conducted an Additional Competitive Underwriting (ACU) auction on October 16, 2026, for a specified Government security, setting the cut-off rate for underwriting commission payable to Primary Dealers. The details of the security and commission rates were announced by Deputy Governor Ajit Prasad.
In such auctions, Primary Dealers (PDs) submit competitive bids for the commission they are willing to accept for underwriting government securities. The cut-off determines which bids are accepted, promoting market efficiency and reducing government borrowing costs. The absence of devolvement indicates strong investor appetite.
This mechanism supports the government’s auction calendar by ensuring adequate participation. Legal advisors to PDs should review commission structures and obligations under the PD agreement with RBI, ensuring compliance with the Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008.
