News Column

RBI- Auction of Eight State Government Securities for ' 5,250 crore on August 12, 2014

August 11, 2014



ENP Newswire - 11 August 2014

Release date- 08082014 - Auction of Eight State Government Securities for ' 5,250 crore on August 12, 2014.

The following eight State Governments have offered to sell 2/5/10 year securities by way of auction for an aggregate amount of '5,250 crore (Face Value). The State-wise break up is as follows:

Sr. No.

State

Amount to be raised

(' crore)

Tenure Years

1

Chhattisgarh

750

10

2

Goa

200

10

3

Haryana#

600

2/10

4

Kerala

700

10

5

Maharashtra

1,200

10

6

Punjab

300

5

7

Rajasthan

500

10

8

Tamil Nadu*

1,000

10

Total

5,250

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

# Haryana will be issuing two securities viz; i) for 2 years ('300 crore) and ii) for 10 years ('300 crore)

The auction will be conducted on the Reserve Bank of India Core banking Solution (E-Kuber) system on August 12, 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 August 12, 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 August 12, 2014 (Tuesday) and payment by successful bidders will be made during banking hours on August 13, 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 February 13 and August 13 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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