Telangana gets RBI nod for market loans, with runners | Hyderabad News

Currently, state government shares will bear interest at auction rates determined by the RBI.

HYDERABAD: After months of talks with the Union Ministry of Finance, Telangana got clearance from RBI for open market borrowing in the third month of this fiscal year, Sribala Vadlapatla reports. The RBI gave the green signal for off-budget borrowing, but only for the first two quarters and not exceeding Rs 20,000 crore.
Market loans: Telangana gets RBI nod with thin window
After months of strenuous discussions with the Union Finance Ministry, even citing the amended FRBM rules, Telangana finally got regular clearance from RBI for open market borrowing in the third month of this fiscal year, although only with a reduced lending window.
The Union Finance Ministry has given the green signal for off-budget borrowing, but only for the first two quarters, and not exceeding Rs 20,000 crore. Earlier this month, Telangana secured ad hoc clearance to raise Rs 4,000 crore from the market. “This corpus will form part of the total of Rs 20,000 crore, which the state can borrow in the first two quarters of this financial year, leaving time until September to raise the remaining Rs 16,000 crore,” a source said. highly placed to YOU.
On Friday, Telangana used this regular permission to retain a loan withdrawal of Rs 1,000 crore for a repayment period of 12 years at the apex bank. Andhra Pradesh, Assam, Gujarat, Haryana, Madhya Pradesh, Rajasthan, Tamil Nadu and West Bengal will participate in the auction early next week, where the total borrowings of these States is set at Rs 19,000 crore.
The state government had proposed to borrow around Rs 53,000 crore from the market in the financial year 2022-23. Sources said the Union Finance Ministry may open a second window to allow borrowings of Rs 20,000 crore for the last two quarters depending on Telangana’s income during those months.
In addition, a cap of Rs 7,000 to 10,000 crores may be imposed on the state, preventing it from utilizing the entire loan offered in the current window. “The state government has provided sufficient data on its debt burden to the Union Ministry of Finance and the proposed reduction in the lending window will be implemented in installments,” sources said.
Telangana raised Rs 43,784 crore on the open market in the auction conducted by the apex bank in the last financial year. Currently, state government shares will bear interest at auction rates determined by the RBI.

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