2020
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Direct
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Data
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Development
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Depository
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Detailed explanation-1: -SDLs are dated securities issued through normal auction similar to the auctions conducted for dated securities issued by the Central Government (please see question 3). Interest is serviced at half-yearly intervals and the principal is repaid on the maturity date.
Detailed explanation-2: -RBI does not invest in State Government loans either in primary issues or in the secondary market.
Detailed explanation-3: -State Development Loan (SDL) is a bond issued by state governments to fund their fiscal deficit. Each state can borrow up to a set limit. SDLs pay interest on a half-yearly basis and repay the principal amount on maturity. These bonds are issued generally for 10-year but they can be issued with other maturities too.
Detailed explanation-4: -The State Development Loans (SDLs) market is the illiquid segment of the Indian bond market. An SDL index serves as a benchmark for SDL portfolio management and acts as an indicator of the SDL market performance.