To enable small and medium sized investors to participate in the primary auction of government securities, a “Scheme of Non Competitive Bidding” was introduced in January 2002, which is open to any person including firms, companies, corporate bodies, institutions, provident funds, trusts, and any other entity prescribed by RBI.
The scheme provides for allocation of up to 5 per cent of the notified amount at the weighted average rate of accepted bids. With a view to further promoting liquidity in the secondary market and to strengthen the emergence of a benchmark yield curve across maturities, re-issuances of benchmark securities have been in place for quite some time.