Out of the total notified amount of Rs 3,440 crore, the state loan has mopped up Rs 6,933.15 crore. "Some subscriptions received at designated branches of State Bank of India at district headquarters of states are still being reported. The excess subscriptions received by some state governments will be retained," said a RBI release issued on Thursday.

Money market sources said that Mumbai alone received subscriptions worth Rs 5000 crore. According to market sources, the state loan has received an overwhelming response as the yield offered is 26 basis points higher compared with the centre's 10-year paper which is pegged at 11.99 per cent.

"As the yield offered is higher compared with the existing yield in the secondary market which is hovering between 11.93-11.95 per cent, most institutions andprovident funds have lapped up the issue. These entities have to maintain 15 per cent of their total investment in state loans which is another reason why the issue is oversubscribed," said a money makret dealer.

The market feels that the outflow to the tune of Rs 6000 crore will not have an immediate impact on the liquidity position in the market as currently there is sufficient liquidity in the system which will take care of the borrowing needs of the market players. "The main impact will be felt in the forthcoming weeks," said a dealer.

The first tranche of the state loan by 24 state governments for the year 1999-2000 was issued on April 21 for a notified amount of Rs 3,440 crore. As per the state wise allocation, Andhra Pradesh was slated to raise Rs 300 crore, Arunachal pradesh (Rs 3 crore), Assam (Rs 125 crore), Goa (Rs 15 crore),Gujarat (Rs 200 crore), Haryana (Rs 50 crore), Himachal Pradesh (Rs 40 crore), Jammu and Kashmir (Rs 32 crore), Karnataka (Rs 250 crore), kerala (Rs 150 crore) MadhyaPradesh (Rs 225 crore), Maharashtra (Rs 300 crore), Manipur (Rs 20 crore), Meghalaya (Rs 30 crore), Mizoram (Rs 10 crore), Nagaland (Rs 30 crore), Orissa (Rs 200 crore), Punjab (Rs 200 crore), Rajasthan (Rs 400 crore), Sikkim (Rs 20 crore), Tamil Nadu (Rs 225 crore), Tripura (Rs 20 crore), Uttar Pradesh (Rs 370 crore) and West Bengal (Rs 225 crore).

Since the beginning of the new fiscal, the centre has mopped up Rs 14,000 crore through its market borrowing programme out of which Rs 1000 crore is through 364-day treasury bills.