The state government of Punjab has floated a Rs. 695 crore loan on Wednesday to meet the capital cost of pending plan schemes and development schemes. The decision was taken in consultation with the Reserve Bank of India (RBI) and involves selling of Punjab Government Stock (securities) of 10 years tenure for the earmarked amount of Rs. 695 crore.
The central government has allowed the state government to go with the floatation, which is regarded as a significant step towards ensuring liquidity of funds for the execution of pending projects.
The Stock would be available for sale on February 27, 2009 through RBI by means of auction. The loan, which is meant for a period of 10 years, is required to be repaid by March 2, 2019. Interest would be calculated on half-yearly basis on September 2 and March 2, and the cut-off yield would be the annual percent rate of the coupon sold at the time of auction. | 
