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The Reserve Bank of India (RBI), on Thursday, said it will conduct the second purchase auction of State Development Loans (SDLs) under Open Market Operations (OMOs) for an aggregate amount of ₹10,000 crore on November 5.
The central bank said it will purchase three SDLs each of 14 States and a Union Territory – Manipur, Meghalaya, Mizoram, Nagaland, Odisha, Puducherry, Punjab, Rajasthan, Sikkim, Tamil Nadu, Telangana, Tripura, Uttarakhand, Uttar Pradesh and West Bengal.
Most of these SDLs mature in 2029, 2030 and 2031. There is no security-wise notified amount at the auction.
Referring to the first auction under OMOs in SDLs on October 22, the RBI said: “The response was positive, with securities offered for each State being subscribed to, and at yield spreads over central government securities of equivalent maturity at levels which would foster supportive financing conditions for new primary issuances of SDLs. ”
In its ‘Statement on Developmental and Regulatory Policies’, issued on October 9, the central bank said to improve liquidity and facilitate efficient pricing, it will conduct OMOs in SDLs as a special case during the current financial year.
The OMOs would be conducted for a basket of SDLs comprising securities issued by States.
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