Bhubaneswar: The state government is going to raise loans worth Rs 500 crore from the open market through sale of government securities of six years tenure, official sources said Sunday.
As per a notification issued by the finance department in this regard, the proceeds of the loan will be utilized for financing development programmes and projects that are to be implemented in the state. The state government has obtained necessary consent of the Union government for raising the loan.
The securities stock would be sold through auction to be conducted by the Reserve Bank of India (RBI), Mumbai November 14. Bids for the auction are to be submitted in electronic format to RBI’s core banking solution (CBS) system- E-Kuber – on the same day between 10.30 am and 12 pm, the notification said.
The RBI would display the auction results on the same day, while successful bidder has to make payment November 15 before close of banking hours.
The six-year tenure borrowing stock would commence from November 15 this year while the loan will be repaid November 15, 2023. The interest for this borrowing would be paid May 15 and November 15 of every year till the end of the tenure, read the notification.
The finance department said that the investment in government stock would 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.
This is the sixth time the state government is going in for borrowing from the open market in the current financial year. Earlier, the government had issued notifications to raise Rs 4500 crore from the market. With this fresh borrowing, the total market borrowing of the state will be Rs 5,000 crore.
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