**Executive Summary**
This document from the Tamil Nadu Government Gazette Extraordinary announces the sale of Tamil Nadu Government Stock (Securities) of 10-year tenure for an aggregate amount of Rs. 1000 crore (Nominal). The auction will be conducted by the Reserve Bank of India on January 14, 2025, with payment due on January 15, 2025. The loan will be repaid on January 15, 2035.
**Key Points / Main Content**
* **Loan Details:**
* The Government of Tamil Nadu is selling Tamil Nadu Government Stock (Securities) for Rs. 1000 crore (Nominal).
* The object of the loan is to finance part of the capital expenditure of Plan Schemes and other Development Schemes under execution.
* Central Government's consent has been obtained for the floatation of this loan.
* **Auction Process:**
* The sale will be through auction by the Reserve Bank of India, Mumbai Office (PDO).
* The method of the issue is in the manner prescribed in the General Notification No.644(L)/W&M-II/2023, dated February 22, 2023.
* The coupon rate will be determined by the Reserve Bank of India at the yield-based auction under multiple price formats.
* The auction will be held on January 14, 2025, at the Reserve Bank of India, Mumbai Office.
* Competitive bids must be submitted electronically via the Reserve Bank of India Core Banking Solution (E-Kuber) System between 10:30 A.M. and 11:30 A.M. on January 14, 2025.
* Non-competitive bids must be submitted electronically via the Reserve Bank of India Core Banking Solution (E-Kuber) System between 10:30 A.M. and 11:00 A.M. on January 14, 2025.
* The Reserve Bank of India will display the result of the auction on its website on the same day.
* **Bidding and Payment:**
* Up to 10% of the notified amount of the sale will be allotted to eligible individuals and institutions subject to a maximum limit of 1% of the notified amount for a single bid.
* Successful bidders must make payments on January 15, 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.
* **Tenure and Repayment:**
* The stock has a 10-year tenure, commencing on January 15, 2025.
* The loan will be repaid at par on January 15, 2035.
* **Interest and Eligibility:**
* The cut-off yield determined at the auction will be the coupon rate per annum on the Stock sold at the auction.
* Interest will be paid on July 15 and January 15.
* The investment in Government Stock is an eligible investment for banks for the purpose of Statutory Liquidity Ratio (SLR).
* The stocks qualify for the ready forward facility.
**Impact Analysis**
**Banks**
* **Impact:** Banks can use the investment in Government Stock to meet their Statutory Liquidity Ratio (SLR) requirements.
* **Action Required:** Banks should participate in the auction to acquire the government stock for their SLR requirements.
**Individuals and Institutions**
* **Impact:** Eligible individuals and institutions have the opportunity to invest in a secure government security.
* **Action Required:** Individuals and institutions must submit bids electronically via the E-Kuber system within the specified time frame if they wish to invest, adhering to the limits for non-competitive bidding.
**Tamil Nadu Government**
* **Impact:** The Tamil Nadu Government will raise funds for Plan Schemes and other Development Schemes under execution.
* **Action Required:** The Tamil Nadu Government needs to manage the auction process through the Finance Department and oversee the utilization of funds raised.
Key Entities Referenced
Tamil Nadu Government: The governing body issuing the notification regarding market borrowing.
Reserve Bank of India: The central bank responsible for conducting the auction of government stock and managing related transactions.
Banking Regulation Act, 1949: The act under which investments in Government Stock are eligible for Statutory Liquidity Ratio (SLR).
Tamil Nadu Government Stock: Securities issued by the Government of Tamil Nadu with a 10-year tenure, being offered for sale through auction.
Article 293(3) of the Constitution of India: Article of the Constitution requiring consent of the Central Government for state government loans.