Assam Government Notifies Sale of Rs. 900 Crore 14-Year Securities for Development Projects

The Government of Assam, through its Finance (Budget) Department, Ways Means Branch, issued a notification on December 11, 2025, announcing the sale of Assam Government Stock (securities) with a 14-year tenure. This financial instrument, identified as Notification No.E-560897/2025/116, authorized the sale of securities for an aggregate nominal amount of Rs. 900 Crore. The sale was made subject to specific terms outlined within the notification itself, as well as the general terms and conditions stipulated in the Government of Assam's General Notification No. BW.19/2003, dated July 20, 2007. The notification came into force upon its publication in the Extraordinary Gazette on December 11, 2025.

The primary objective behind the issuance of these securities was to secure funding for the state's developmental agenda. The proceeds generated from this loan were earmarked for financing productive development programmes and projects slated for implementation across the State, in alignment with the annual budget. A crucial prerequisite for the floatation of this loan, as mandated by Article 293(3) of the Constitution of India, was the prior consent of the Central Government, which had been duly obtained.

The method for issuing the Government Stock involved an auction process conducted by the Reserve Bank of India (RBI) at its Mumbai Office (PDO) Fort. The coupon rate for these securities was to be determined by the RBI through a yield-based auction, utilizing multiple price formats, as prescribed in paragraph 6.1 of the aforementioned General Notification. To encourage broader participation, the notification included provisions for non-competitive bidders, allowing for the allotment of up to 10% of the notified amount to eligible individuals and institutions. A single bid under this scheme was capped at 1% of the notified amount, adhering to the Revised Scheme for Non-competitive Bidding Facility in the Auctions of State Government Securities, detailed in Annexure-II of the General Notification.

The auction was scheduled to take place at the Reserve Bank of India's Mumbai Office on December 16, 2025. Bids were required to be submitted electronically via the Reserve Bank of India Core Banking Solution (E-Kuber) System. Competitive bids were accepted between 10:30 A.M. and 11:30 A.M. on the auction date, while non-competitive bids had a submission window from 10:30 A.M. to 11:00 A.M. The results of the auction were to be displayed on the RBI's website on the same day, with successful bidders required to make payments by December 17, 2025. Payments could be made through cash, bankers' cheque, pay order, demand draft payable at RBI Mumbai or Guwahati, or a cheque drawn on accounts with RBI Mumbai (Fort) or Guwahati, all before the close of banking hours on the payment date.

The securities carry a 14-year tenure, commencing on December 17, 2025. The loan is scheduled for repayment at par on December 17, 2039. Interest on the stock will be paid semi-annually, specifically on June 17 and December 17 each year, with the cut-off yield determined at the auction serving as the annual coupon rate. Significantly, the investment in these Government Stock securities is recognized as an eligible investment for banks for the purpose of maintaining their Statutory Liquidity Ratio (SLR) under Section 24 of the Banking Regulation Act, 1949. (SLR refers to the minimum percentage of deposits that a commercial bank has to maintain in the form of liquid assets like cash, gold, or other approved securities). Furthermore, these stocks qualify for the ready forward facility, enhancing their liquidity and marketability.

The legislative intent behind this notification was to facilitate the state's financial autonomy and ensure a steady flow of funds for critical public expenditure. The legislation provided: “The proceeds of the loan will be utilized for financing productive development programmes and projects to be implemented in the State as per the annual budget.” This underscores a policy rationale focused on leveraging market mechanisms to fund infrastructure and social development initiatives, thereby contributing to economic growth and public welfare within Assam. The issuance addresses the ongoing need for state governments to raise capital for their budgetary allocations, particularly for capital-intensive projects.

By issuing these securities, the Government of Assam aimed to tap into the financial markets, offering a secure investment avenue while simultaneously securing necessary capital. The framework for this issuance, including the auction process and non-competitive bidding, builds upon the existing statutory framework established by the General Notification of 2007, ensuring transparency and broad participation. The eligibility of these securities for SLR purposes provides an incentive for commercial banks to invest, thereby ensuring a robust demand for the stock and contributing to the stability of the state's borrowing program. This mechanism allows the state to manage its public debt effectively, aligning its financial requirements with the broader economic objectives of development and progress.

Keywords: Assam Government Stock, State Government Securities, Public Debt, Development Projects, RBI Auction, SLR, Non-competitive Bidding, Finance Notification, Assam Budget Geo Tags: India, Assam District: Not Applicable