Reserve Bank of India announces auction of State Government Securities worth 14,500 Crore

The RBI’s scheduled auction on April 28, 2026, facilitates the market borrowing of seven Indian states to meet their fiscal requirements for the 2026-27 financial year. The total notified amount of ₹14,500 crore is distributed among Assam, Bihar, Chhattisgarh, Kerala, Madhya Pradesh, Uttar Pradesh, and Uttarakhand. Uttar Pradesh is the largest borrower in this tranche, offering a re-issue of 7.67% SGS 2041 and a new 10-year security. Bihar is also re-issuing 7.72% SGS 2041. The securities range in tenor from short-term 3-year bonds (Uttarakhand) to long-term 23-year bonds (Kerala).

This auction is critical for banking students and financial professionals as it impacts the Statutory Liquidity Ratio (SLR) requirements for banks. Under Section 24 of the Banking Regulation Act, 1949, investments in these State Government Stocks qualify as eligible government securities. For retail investors, the RBI has streamlined access via the 'Scheme for Non-competitive Bidding Facility,' allowing up to 10 percent of the notified amount for individuals and institutions, accessible through the Retail Direct portal. The yields determined in these auctions serve as a benchmark for the fiscal health and borrowing costs of individual states.

Glossary

SGS: State Government Securities; dated securities issued by state governments to fund their budget deficits.

SLR: Statutory Liquidity Ratio; the minimum percentage of deposits that a commercial bank has to maintain in the form of liquid cash, gold, or other securities.