Government of Jammu & Kashmir announces Auction of State Development Loan 2020 for Rs.500.00 crore on March 31, 2010

The Government of Jammu & Kashmir has announced the sale of its 10-year State Development Loan (SDL) for an aggregate amount of Rs.500.00 crore through yield based auction using multiple price auction method.

The auction will be conducted by the Reserve Bank of India (RBI) at Mumbai on March 31, 2010 (Wednesday). The Government Stock up to 10 per cent of the notified amount of the sale will be allotted to eligible individuals and institutions subject to a maximum limit of one per cent of its notified amount for a single bid as per the Scheme for Non-competitive Bidding Facility (available in RBI website).

Both competitive and non-competitive bids for the auction should be submitted in electronic format on the Negotiated Dealing System (NDS) on March 31, 2010. The non-competitive bids should be submitted between 10.30 A.M. and 11.30 A.M. and the competitive bids should be submitted between 10.30 A.M. and 12.30 P.M.

The yield percent per annum expected by the bidder should be expressed up to two decimal points. An investor can submit more than one competitive bid at different prices in electronic format on the NDS. However, the aggregate amount of bids submitted by a person should not exceed the notified amount.

The Reserve Bank of India will determine the maximum yield at which bids will be accepted. Securities will be issued for a minimum nominal amount of Rs.10,000 and multiples of Rs.10,000 thereafter.

The result of the auction will be announced on March 31, 2010 and payment by successful bidders will be made during banking hours on April 05, 2010 (Monday) at Mumbai and at respective Regional Office of RBI.

The Government Stock will bear interest at the rate determined by RBI at the auction. Interest will be paid half yearly on September 30 and March 30. The Stock will be governed by the provisions of the Government Securities Act, 2006 and Government Securities Regulations, 2007.

The investment in Government Stock will be reckoned as an eligible investment in Government Securities by banks for the purpose of Statutory Liquidity Ratio (SLR) under Section 24 of the Banking Regulation Act, 1949. The stock will qualify for the ready forward facility.

Ajit Prasad
Manager

Press Release : 2009-2010/1319