Assam and Bihar will auction ₹2,000 crore in state securities via yield-based auctions. Tenor is 9 years, part of ₹23,300 crore total issuance.
States Launch ₹23,300 Crore Securities Auction
The Reserve Bank of India announced a yield-based auction of State Government Securities, with Assam and Bihar each offering ₹1,000 crore of 9-year maturity bonds. The total notified amount across all participating states is ₹23,300 crore. The RBI acts as the auctioneer and settlement agent under the market borrowing agreements with state governments.
These bonds fall under the statutory investment pattern (SLR) eligible securities and are typically subscribed by commercial banks and financial institutions to meet regulatory requirements under Section 18 of the Banking Regulation Act, 1949. The yields discovered will influence future borrowing costs for the issuing states.
Legal practitioners advising on public finance or municipal projects should note the increasing reliance on market-based borrowings by states. Documentation for state-linked financings must account for repayment guarantees, fiscal responsibility provisions, and enforceability of state obligations under the Government Securities Act, 2006.
