Summary of this article
Eleven states plan borrowing through RBI-run securities auction
Total amount raised set at Rs 26,815 crore
Retail investors can bid via non-competitive RBI platform
A total of Rs 26,815 crore will be raised by various state governments by auctioning government securities on January 13, 2026. The reserve Bank of India (RBI) will carry out this auction using its electronic Core Banking Solution platform known as E-Kuber.
State government securities, also known as State development loans, are the bonds issued by the state governments to fulfil their borrowing criteria. These securities are considered part of the government securities market and are regulated by the central bank.
States Involved and Total Amount
A total of 11 states will take part in the auction. Assam will raise Rs 1,000 crore through a 12-year security. Bihar will issue two 18- and 25-year government securities amounting to total Rs 3,000 crore. Chhattisgarh and Haryana will each raise Rs 2,000 crore through securities with different maturities.
Karnataka will raise the largest amount, Rs 6,000 crore. This includes a new security with a tenor of six years and six months, along with two re-issued securities carrying coupon rates of 7.16 per cent and 7.51 per cent. Tamil Nadu will raise Rs 4,700 crore, including 2 re-issued securities with 7.50 per cent and 7.58 per cent coupon rates, respectively.
Other states in this list include Mizoram, Punjab, Telangana, Uttarakhand, and West Bengal. These states are financing these funds through securities with tenors ranging between five to 26 years.
Types of Auctions
The auction will have yield-based and price-based securities. In yield-based auctions, bidders quote the yield they expect, while in price-based auctions, bidders quote the price they are willing to pay for a security with a fixed coupon rate.
Re-issued securities are previously issued bond which are re-introduced in the market to raise more money. These securities retain the original coupon rate and maturity tenor.
Who can Participate
Both competitive and non-competitive bidding is available. Competitive bidding is open to institutional investors and others who submit bids specifying yield or price. Non-competitive bidding aims at individual investors and qualified institutions that prefer to invest without quoting yield or price.
Non-competitive bidders are allowed to purchase up to 10 per cent of the notified amount of each security. However, a single non-competitive bid cannot exceed 1 per cent of the notified amount for that security.
The retail investors can invest via the RBI Retail Direct portal. This site enables users to invest in government securities without any intermediary.
Auction Timings and Settlement
Competitive bids can be submitted between 10.30 am and 11.30 am on January 13. Between 10:30 am and 11:00 am, non- competitive bids must be submitted. Digital submission of all bids has to be done via the E-Kuber platform, except in the event of system failure.
The outcomes of the auction will be declared the same day. The successful bidders will be required to pay on January 14, 2026, within the banking hours.
Interest Payments and Other Features
The rate of interest on new securities will be set based on auction result. The interest will be paid on a half yearly basis. In case of re-issued securities, the interest rate will be paid on the initial coupon rate determined during the initial issuance.
The securities will be issued for a minimum investment of Rs 10,000, and in multiples of Rs 10,000. Investments in state government securities qualify as eligible government securities for banks under statutory liquidity ratio norms and are also eligible for ready forward transactions.
The securities will be subject to the provisions of the Government Securities Act, 2006, and associated regulations.
