First Loan To Both States Approved

Posted : September 11, 2014 at 1:24 pm IST by ManaTeluguMovies

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The aftershocks of bifurcation are still on and the economic position of both Telangana and Andhra Pradesh has been shaky. But now, both the states got their first token of loans from financial institutions. Usually, the governments take loans by pledging bonds to financial institutions. The institution which offers the lowest rate of interest is selected by the Reserve Bank Of India (RBI).

As part of that, an e-auction took place in Mumbai wherein 177 financial institutions participated in the auction for Telangana state. The total amount of bids came to Rs 8978 crores. Out of them, only 10 bids were approved by RBI and TS received Rs 2000 crores. 

For Andhra Pradesh, a total of 132 bids came in and the bid value reached Rs 6347 crores. Based on the suggestions from AP government, the RBI has approved 27 bids and collated Rs 2000 crores. Ideally, AP government wanted only Rs 1500 crores but they got an additional Rs 500 crores. The interest rate for TS is 9.06% and AP is 9.08%. Both governments are expected to repay this loan in a tenure of 10 years. Since this is the first time both states are getting loans after bifurcation, this event became significant.