Published on: July 23, 2021

STATE DEVELOPMENT LOANS

STATE DEVELOPMENT LOANS

enviously What is in news : Karnataka to raise state development loans from RBI

  • What are state development loans : Dated securities issued by states for meeting their market borrowings requirements
  • Purpose : Meet the budgetary needs of state governments
  • Will there be a limit on borrowing : Yes, it will be specifed by RBI
  • Who buys SDLs : RBI, commercial banks, mutual funds, insurance companies. Other players than Government get a higher interest rate
  • Interest rates are determined by auctions
  • They are traded electronically on the RBI managed NDS-OM (Negotiated Dealing System-Order Matching) and traded in the voice market (NDS)