Auction of State Government Securities
Distilled Policy Brief
- State Governments have offered to sell stock through an auction for an aggregate amount of ₹24,400 Crore, to be conducted on the Reserve Bank of India Core Banking Solution (E-Kuber) system.
- Eligible individuals and institutions can participate under the Non-competitive Bidding Facility via the RBI Retail Direct portal, with stocks issued for a minimum nominal amount of ₹10,000.00 and multiples thereof.
- Investments in these State Government Stocks are reckoned as eligible investments for banks to maintain their Statutory Liquidity Ratio (SLR) under Section 24 of the Banking Regulation Act, 1949.
🎯 Prelims High-Yield Examination Points
State Government Securities (SDLs) auctions are conducted on the RBI E-Kuber platform, qualify for SLR purposes under the Banking Regulation Act, and retail investors can participate via the RBI Retail Direct portal.
⚖️ Mains Analytical & Syllabus Linkages
Analyze the role of State Development Loans (SDLs) in sub-national fiscal management, deficit financing, and the deepening of the domestic debt market in India.
🎯 UPSC Prelims Practice Drill
Consider the following statements regarding the auction of State Government Securities (State Development Loans): 1. The auctions are conducted by the Reserve Bank of India on its Core Banking Solution (E-Kuber) system. 2. Individual investors are barred from participating in these auctions under the Non-competitive Bidding Facility. 3. Investments in these State Government Stocks are recognized as eligible investments for commercial banks to maintain their Statutory Liquidity Ratio (SLR). Which of the statements given above is/are correct?
- [A] 1 only
- [B] 1 and 3 only
- [C] 2 and 3 only
- [D] 1, 2 and 3
▶ Reveal Official Answer & Analytical Explanation
Statement 1 is correct because the auctions for State Government Securities are conducted on the RBI's Core Banking Solution (E-Kuber) system. Statement 2 is incorrect as eligible individuals and institutions can participate under the Non-competitive Bidding Facility via the RBI Retail Direct portal. Statement 3 is correct since investments in these State Government Stocks are reckoned as eligible investments for banks to maintain their Statutory Liquidity Ratio (SLR) under Section 24 of the Banking Regulation Act, 1949.
🏛️ Historical Twin PYQ Anchor (2021)
Consider the following statements regarding the "National Clean Air Programme (NCAP)": 1. It is implemented by the Ministry of Environment, Forest and Climate Change. 2. Central Pollution Control Board acts as the sole regulatory executive body.