Relying on established theories in auction literature, the lacunae in the design of auction mechanism used by the banks are identifi ed. The choice of security used for the payment of the bid amount, the proportional distribution between upfront cash and debt issued by the bidder, and the priority of the bidder’s payment are evaluated. Banks should review the choice of
LICs recent move to sell its Rs 3,400 crore secured principal debt in the Reliance Capital (RCAP), that too barely less than two weeks ahead of the binding bids submission deadline, has upset the RCAP lenders and bidders.LIC is conducting a .