MUMBAI: A new release issued by Reserve Bank of India (RBI) today (Wednesday, April 1) has stated that Kerala will be raising Rs6000 crore through the auction of State Development Loans (SDLs) on April 7, the first such auction in the new financial year.
This will be done through the sale of three types of securities with maturities of 10 years, 12 years and 15 years, each aiming to raise Rs2000 crore through yield-based auctions. A total amount of Rs36,000 crore will be raised by 16 states on April 7, according to the new release on Wednesday.
The finance minister Dr Thomas Isaac has already hinted at frontloading of the state’s borrowings in the wake of the severe financial constraints the state has been going through and further exacerbated by the Covid-19 outbreak
An earlier release from RBI on Tuesday had said that Kerala would be raising Rs1500 crore through the auction on April 7 and an additional Rs1500 crore through another two auctions to be held during the month of April itself.
The earlier release had also said Kerala would be raising a total of Rs6500 crore during the first quarter alone and this was reported by businessbenchmark.news through an earlier news story. However, the earlier plan seems to have been revised and the new plan speeds up the borrowing plan.
“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,” the RBI added in its release.