RBI · Reserve Bank of India ·

Auction of State Government Securities

Distilled Policy Brief

  • State Governments are offering to sell securities (State Development Loans) for an aggregate amount of ₹31,200 Crore through auctions conducted on the Reserve Bank of India's Core Banking Solution (E-Kuber) system.
  • These State Government Stocks are governed by the Government Securities Act, 2006 and are recognized as eligible investments for banks to meet their Statutory Liquidity Ratio (SLR) targets under Section 24 of the Banking Regulation Act, 1949.

🎯 Prelims High-Yield Examination Points

State Development Loans (SDLs), RBI's E-Kuber platform, Retail Direct Scheme, and SLR eligibility of state government securities.

⚖️ Mains Analytical & Syllabus Linkages

State government market borrowings, fiscal federalism, public debt management, and the role of RBI as the debt manager for states.

🎯 UPSC Prelims Practice Drill

Economy

With reference to State Government Securities (State Development Loans) in India, consider the following statements: 1. They are auctioned by the Reserve Bank of India through its Core Banking Solution (E-Kuber) system. 2. They are legally governed by the provisions of the Government Securities Act, 2006. 3. They are recognized as eligible investments for commercial banks to meet their Statutory Liquidity Ratio (SLR) targets under the Banking Regulation Act, 1949. Which of the statements given above are correct?

  • [A] 1 and 2 only
  • [B] 2 and 3 only
  • [C] 1 and 3 only
  • [D] 1, 2 and 3
▶ Reveal Official Answer & Analytical Explanation
✓ Correct Option: [D] 1, 2 and 3

All three statements are correct. State Government Securities (State Development Loans) are auctioned electronically on the RBI's Core Banking Solution (E-Kuber) system. They are legally governed by the Government Securities Act, 2006. Furthermore, under Section 24 of the Banking Regulation Act, 1949, these securities are recognized as eligible assets for commercial banks to meet their Statutory Liquidity Ratio (SLR) requirements.

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🏛️ Historical Twin PYQ Anchor (2021)

UPSC Prelims 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.

Forensic Anchor: Cabinet Allocation of Business Rules & NCAP Framework
Examiner Trap Takeaway: UPSC swapped Central Pollution Control Board role with State Pollution Control Boards for state-level monitoring.

📚 Static Syllabus & Constitutional Linkages

Statutory Liquidity Ratio (SLR): Found in standard Indian Economy textbooks under RBI's Monetary Policy Instruments; it is the reserve requirement that commercial banks must maintain in gold, cash, or approved government securities before providing credit.
State Development Loans (SDLs): Found in chapters on Public Finance and Financial Markets; SDLs are debt securities issued by state governments to meet their budgetary requirements, managed by the RBI.