State Government Security
State Government Securities also termed as State development Loan, are issued by the State Governments.RBI coordinates the actual process of selling these securities. Each state is allowed to issue securities up to a certain limit each year.
Generally, the coupon rates on are marginally higher than those of GOI-Secs issued for the same maturity.
The State Development Loans are normally sold through the auction process. All the auctions are conducted by Reserve Bank of India.
State Development Loans also qualify for SLR status.Interest payment frequency is half yearly and other modalities are similar to GOI-Secs.