Poll code in force, cash-strapped Punjab Government raises Rs 2,500-crore loan | Check Details
PTC Web Desk: Notwithstanding the model code of conduct that is in force in the run-up to the Lok Sabha elections 2024, the cash-strapped Punjab Government has initiated the process to raise Rs 2,500 crore through the auction of Punjab Government Stock. This auction, which took place on Tuesday, is split into two tranches — Rs. 1,000 crore for an eight-year tenure and Rs 1,500 crore for a 13-year tenure.
As per the notification, the purpose of this auction is to fund the finance part of Capital Expenditure for plan schemes and development projects currently under execution. The auction was conducted at the Reserve Bank of India, Mumbai Office (PDO) on April 23.
Eligible individuals and institutions can receive up to 10% of the notified amount of the sale, with a maximum limit of 1% for a single bid. As per the notification, bids were to be submitted electronically on the Reserve Bank of India Core Banking Solution (E-Kuber) system between 10.30 am and 11. 30 am for competitive bids, and between 10. 30 am and 11 am for non-competitive bids. The auction results would be available on the Reserve Bank of India's website on the same day.
The notification states that successful bidders are required to make payments by April 24, before the close of banking hours. Payments can be made through various methods, including cash, bankers' cheque/pay order, demand draft, or a cheque drawn on their RBI account.
The stocks will have tenures of 8 years and 13 years, commencing on April 24, 2024. Repayment for the 8-year tenure will be on April 24, 2032, while the 13-year tenure will be repaid at par on April 24, 2037. Interest payments will be made on October 24 and April 24, with the coupon rate determined at the auction.
Investment in Government Stock qualifies as an eligible investment in Government Securities for banks under the Statutory Liquidity Ratio (SLR) under Section 24 of the Banking Regulation Act, 1949. These stocks also qualify for the ready forward facility.
This move by the cash-strapped Punjab Government aims to meet financial needs for ongoing schemes and projects.
- With inputs from our correspondent
