Question

State Development Loans (SDLs) are issued by state governments. Which of the following statements about SDLs is correct?

A SDLs are issued directly by state governments without RBI involvement and are not eligible as SLR securities
B SDLs are issued by the RBI on behalf of state governments through the auction mechanism, carry a slightly higher yield than Central Government securities of similar maturity, and are eligible for SLR computation
C SDLs can only be purchased by other state governments and not by commercial banks
D SDLs are short-term instruments with a maximum maturity of 1 year and are issued at a discount like T-Bills
E SDLs are guaranteed by the Central Government and therefore carry the same credit risk as Central Government dated securities
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