(MENAFN - Qatar News Agency) Eleven Indian State (provincial) Governments will on Tuesday auction yield based 10-year dated securities for an aggregate face value amount of US 1.8 Billion (INR 98.78 Billion), the country's federal Reserve Bank of India (RBI) has said. The auction will be conducted on the RBI Core banking Solution (E-Kuber) system on March 5.
The 11 States are Andhra Pradesh, Bihar, Goa, Haryana, Jharkhand, Kerala, Maharashtra, Nagaland, Tamil Nadu, Tripura and West Bengal. Maharashtra and Andhra Pradesh would auction highest bonds worth US 364.262 Million (INR 20 Billion) each, India's apex bank said. 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.
The State Government Stocks will bear interest at the rates determined by RBI at the auctions. Interest will be paid half yearly on September 6 and March 6 of each year till maturity. The Stocks will be governed by the provisions of the Government Securities Act, 2006 and Government Securities Regulations, 2007.
Last December, RBI conducted four Open Market Operations (OMOs) purchase of gilts to comfort the liquidity and infused US 7.113 Billion (INR 390.571 Billion) into the system. On January 24, the central bank hiked Foreign Institutional Investors (FII) investment limits in government securities and corporate bonds by US 5 Billion (INR 274.524 Billion) each, taking the total cap in domestic debt to US 75 Billion (INR 4.118 Trillion), with a view to bridging the current account deficit. Further liberalising the norms, the three-year lock-in period for FIIs purchasing government securities (G-Secs) for the first time has been done away with, RBI had said earlier.
The sub-limit of US 10 Billion (INR 549.048 Billion) for investment by FIIs and long-term investors in G-Secs stands enhanced by US 5 Billion (INR 274.524 Billion), the RBI said.