Primary Market :

In the primary market, treasury bills are issued by auction technique.

Salient Features of the Auction Technique:

(a) The auction of treasury bills is done only at Reserve Bank of India, Mumbai.

(b) Bids are to be submitted on Negotiated Dealing System (NDS) by 2:30 PM on Wednesday. If Wednesday happens to be a holiday then bids are to be submitted on previous day (Tuesday).

(c) Bids are submitted in terms of price per ` 100. For example, a bid for 91-days Treasury bill auction could be for ` 97.50 for per unit of T-bill of face valuer of ` 100.

(d) Auction committee of Reserve Bank of India decides the cut-off price and results are announced on the same day.

(e) Bids above the cut-off price receive full allotment; bids at cut-off price may receive full or partial allotment and bids below the cut-off price are rejected.