RBI Auction Rs 2,100 Crore SDLs of Meghalaya, Punjab, Tripura, UP

New Delhi (ABC Live): The Reserve Bank of India (RBI) is all set to auction 10-year State Development Loans (SDLs) for an aggregate amount of Rs 2,100 crore through yield based auction using multiple price auction method on May 10, 2011.

It is to mention that the four State Governments of Meghalaya, Punjab, Tripura and Uttar Pradesh have announced the sale of their 10-year SDLs) for an aggregate amount of Rs 2,100 crore
Notified Amount
(` Crore)
Meghalaya 100.000
Punjab 400.000
Tripura 100.000
Uttar Pradesh 1500.000

Both competitive and non-competitive bids for the auction should be submitted in electronic format on the Negotiated Dealing System (NDS) on May 10, 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 May 10, 2011 (Tuesday) and payment by successful bidders will be made during banking hours on May 11, 2011 (Wednesday) 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 November 11 and May 11 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.

Information to this effect was made by Ajit Prasad, Assistant General Manager, RBI.

Dinesh Singh Rawat's Views,

RBI should ask states where they are spending State Development Loans and business plan how state will repay sanctioned loans??

Only Hopes it will happen in India in coming year??