The Reserve Bank of India on Friday announced that it will auction twelve state government securities for Rs 8,950 crore on August 25, 2015.
"The auction will be conducted on the Reserve Bank of India Core banking Solution (E-Kuber) system on August 25, 2015 (Tuesday)," the apex bank said in a notification.
The government stock up to 10 percent 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 per cent 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 25, 2015 (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 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 Rs 10,000.00 and multiples of Rs 10,000.00 thereafter.
The results of the auction will be announced on August 25, 2015 (Tuesday) and payment by successful bidders will be made during banking hours on August 26, 2015 (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 26 and August 26 of each year till maturity for all states. 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.