RBI To Sell State Bonds Worth Rs 4.73 Lakh Crore In March Quarter

"The actual amount of borrowings and the details of the States/UTs participating would be intimated by way of press releases two/ three days prior to the actual auction day and would depend on the requirement of the State Governments/UTs, approval from the Government of India," an RBI notification said. "RBI reserves the right to modify the dates and the amount of auction in consultation with State Governments/UTs."

A government security or G-Sec is a tradable instrument issued by the central or the state governments and sold by the RBI.

State governments issue only bonds or dated securities, which are called the state development loans. G-Secs carry practically no risk of default and, hence, are called risk-free gilt-edged instruments.

The RBI conducts weekly auctions of G-Secs in the bond market, which draws participation from foreign and domestic investors like banks, insurance companies and pension funds.