News Column

RBI- Auction of State Government Stocks (Securities)

July 18, 2014



ENP Newswire - 18 July 2014

Release date- 18072014 - The following eleven State Governments have offered to sell 3/5/10 year securities by way of auction for an aggregate amount of '10550 crore (Face Value).

The State-wise break up is as follows:

Sr.No.

State

Amount to be raised (' cr)

Tenure Yrs

1

Haryana#

1800

3/10

2

Himachal Pradesh

150

10

3

Jammu &Kashmir

300

10

4

Karnataka

2000

10

5

Kerala

1000

10

6

Madhya Pradesh

1000

10

7

Maharashtra

1000

10

8

Punjab

300

5

9

Rajasthan

500

10

10

Tamil Nadu*

1000

10

11

West Bengal

1500

10

Total

10550

*Tamil Nadu will have option to retain additional subscription of '250 cr

# Haryana will be issuing two securities of i) 10 yr tenure for ' 1000cr and ii) 3yr tenure for ' 800cr.

The auction will be conducted on the Reserve Bank of India Core banking Solution (E-Kuber) system on July 22, 2014 (Tuesday). The Government Stock up to 10 % 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 1 % of its notified amount for a single bid per stock as per the Scheme for Non-competitive Bidding Facility (available on RBI website).

Both competitive and non-competitive bids for the auction should be submitted in electronic format on the Reserve Bank of India Core banking Solution (E-Kuber) system on July 22, 2014 (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 12.00 noon.

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 Reserve Bank of India Core banking Solution (E-Kuber) system. However, the aggregate amount of bids submitted by a bidder should not exceed the notified amount for each State.

The Reserve Bank of India will determine the maximum yield/minimum price 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 July 22, 2014 (Tuesday) and payment by successful bidders will be made during banking hours on July 23, 2014 (Wednesday) at Mumbai and at respective Regional Offices of RBI.

The State Government Stocks will bear interest at the rates determined by RBI at the auctions. Interest will be paid half yearly on January 23 and July 23 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 State 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


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Source: ENP Newswire


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