KARACHI: State Bank of Pakistan (SBP) has revised the modus-operandi for acceptance of non-competitive bids (NCBs) for auction of Market Treasury Bills (MTBs) and Pakistan Investment Bonds (PIBs). 

According to a circular (FSCD Circular No.1) issued by the SBP here on Thursday, the non-competitive bid will be sent to the SBP separately from the normal bids before commencement of primary auction time with the name and amount of investors without quoting price through primary dealers. 

The circular said the investors will be allowed to submit one bid in a single tender and in case of submission of multiple bids in one tender by a single investor, all such bids would be treated as void. Further, non-competitive bid(s) will be accepted at weighted average yield in each tender as decided in the primary auction. In case of over subscription, non-competitive bids will be accepted in order of the lowest to the highest amount or on pro-rata basis, the circular added. 

It may be mentioned that according to the State Bank s rules governing Primary Dealer system, non-competitive bids are set at 15 per cent of the pre-announced auction target of MTBs/PIBs in each tender for investors other than banks/DFls/NBFls through primary dealers.

The facility is intended to accommodate individual and small institutional investors to invest directly in MTBs and PIBs issued by the Government of Pakistan. However, the quantum size of non-competitive bids for one investor will be linked with auction target i.e. 0.25 per cent of the pre-announced auction target or PKR 25 million, whichever is higher.