**Executive Summary**
The Tamil Nadu Government Gazette Extraordinary, dated July 10, 2025, announces the sale of Tamil Nadu Government Stock (securities) with a 10-year tenure, with an aggregate amount of ₹1000 crore (Nominal). The auction will be conducted by the Reserve Bank of India (RBI) on July 15, 2025, and payments from successful bidders are due on July 16, 2025. The purpose of the loan is to finance part of the capital expenditure of Plan Schemes and other Development Schemes under execution.
**Key Points / Main Content**
* **Loan Details:**
* The sale of Tamil Nadu Government Stock (securities) for ₹1000 crore (Nominal).
* The stock has a tenure of 10 years, commencing on July 16, 2025, and will be repaid on July 16, 2035.
* **Auction Process:**
* Conducted by the Reserve Bank of India (RBI) Mumbai Office on July 15, 2025.
* Competitive bids to be submitted electronically on the RBI's E-Kuber system between 10:30 A.M. and 11:30 A.M. on July 15, 2025.
* Non-competitive bids to be submitted electronically on the RBI's E-Kuber system between 10:30 A.M. and 11:00 A.M. on July 15, 2025.
* Up to 10% of the notified amount is allotted to eligible individuals and institutions, with a maximum limit of 1% for a single bid, according to the Revised Scheme for Non-competitive Bidding.
* **Interest and Eligibility:**
* The coupon rate (interest) will be determined by the RBI at the yield-based auction.
* Interest will be paid semi-annually on January 16 and July 16.
* The investment qualifies as an eligible investment in Government Securities for banks under Section 24 of the Banking Regulation Act, 1949, for Statutory Liquidity Ratio (SLR) purposes.
* **Payment:**
* Payments by successful bidders are due on July 16, 2025, before the close of banking hours.
* Payments can be made via cash, banker's cheque/pay order, demand draft payable at Reserve Bank of India, Mumbai/Chennai or a cheque drawn on their account with Reserve Bank of India, Mumbai (Fort)/Chennai.
* **Objectives:**
* To finance part of capital expenditure for Plan Schemes and other Development Schemes.
* Consent from the Central Government has been obtained.
**Impact Analysis**
**Tamil Nadu Government**
* **Impact**: Securing funds for capital expenditure and development schemes through market borrowing.
* **Action Required**: Manage the auction process, utilise the funds raised, and ensure timely repayment.
**Reserve Bank of India (RBI)**
* **Impact**: Responsible for conducting the auction, determining the coupon rate, and managing the payment process.
* **Action Required**: Execute the auction as per the notification, display the auction results on their website, and oversee the payment process.
**Banks and Financial Institutions**
* **Impact**: Opportunity to invest in Government Securities and fulfil SLR requirements.
* **Action Required**: Participate in the auction, submit bids via the E-Kuber system, and make payments if successful.
**Eligible Individuals and Institutions**
* **Impact**: Opportunity to invest in government securities through non-competitive bidding.
* **Action Required**: Submit non-competitive bids via the E-Kuber system within the specified time frame.
Key Entities Referenced
Tamil Nadu Government Stock: Securities of 10-year tenure being sold by the Government of Tamil Nadu to borrow money from the market via auction.
Reserve Bank of India: The central bank, responsible for conducting the auction of the Government Stock and managing the payments.
Banking Regulation Act, 1949: The Act under which the investment in Government Stock is considered an eligible investment by banks for Statutory Liquidity Ratio (SLR).
Chennai: City where payments can be made to the Reserve Bank of India.
Mumbai: City where auction by the Reserve Bank of India will be held, and where payments can be made to the Reserve Bank of India.