Eight State Governments announce Auction of State Development Loans 2021 for ` 3,831.140 crore on March 1, 2011

The following eight State Governments have announced the sale of their 10-year State Development Loans (SDLs) for an aggregate amount of ` 3,831.140 crore through yield based auction using multiple price auction method.

* Govts  of Jammu & Kashmir and Maharashtra will also have an option to retain additional subscription up to a maximum amount of ` 150 crore and `204.267 crore (Nominal) respectively over and above the notified amount.

The auction will be conducted by the Reserve Bank of India (RBI) at Mumbai on March 1, 2011 (Tuesday). The Government Stock upto 10 per cent of the notified amount of the sale of each of the stock 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 per stock 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 1, 2011(Tuesday). 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 upto 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 for each State.

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 `10,000.00 and multiples of `10,000.00 thereafter.

The results of the auction will be announced on March 1, 2011 (Tuesday) and payment by successful bidders will be made during banking hours on March 3, 2011 (Thursday) at Mumbai and at respective Regional Offices of RBI.

The Government Stocks will bear interest at the rates determined by RBI at the auctions. Interest will be paid half yearly on September 3 and March 3 of each year till maturity. The Stocks will be governed by the provisions of the Government Securities Act, 2006 and Government Securities Regulations, 2007.

The investment in Government Stocks 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 stocks will qualify for the ready forward facility.

Ajit Prasad
Assistant General Manager

Press Release : 2010-2011/1233