KARACHI, Sept 29: The State Bank on Saturday introduced changes to accept the treasury bills and other government papers.

A circular of the SBP said in order to further streamline the auction process of Government Securities (Market Treasury Bills and Pakistan Investment Bonds) and Open Market Operations, the SBP has decided to introduce changes.

According to the first change, the SBP will have the discretion to accept bids submitted in auctions of Government Securities (Market Treasury Bills and Pakistan Investment Bonds) and Open Market Operations on a ‘pro-rata volume’ basis. If the amount of bids submitted up to the cut-off price or yield in a particular tenor is more than the amount required by SBP, the SBP at its discretion, can accept an amount lower than the total amount offered at the cut-off, said the circular.

In case SBP decides to accept bids on a pro-rata volume basis, banks or primary dealers (PDs) will be allocated an amount equivalent to their proportion in the total bids submitted at the given cut-off yield or price.

Amounts allocated to banks or PDs on pro-rata volume basis will be rounded off to the nearest Rs50 million (face value).

The circular says the pro-rata rule will not be applicable on any bid equal to or less than Rs50 million (face value).

In such an instance, bank or PD will be allocated 100pc of the bid amount.