The Reserve Bank of India (RBI) on December 27, 2023, issued the Reserve Bank of India (Government Securities Lending) Directions, 2023
These Directions shall come into effect from December 27, 2023.
The following has been stated namely: -
• It states that these Directions shall be applicable to all Government securities lending transactions, undertaken in Over-the-Counter markets.
• It states that the Government securities issued by the Central Government excluding Treasury Bills shall be eligible for lending/borrowing under a GSL transaction. Securities obtained under a repo transaction, including through the Reserve Bank’s Liquidity Adjustment Facility, or borrowed under another GSL transaction shall also be eligible to be lent under a GSL transaction.
• It states that the Government securities issued by the Central Government (including Treasury Bills) and the State Governments shall be eligible for placing as collateral under a GSL transaction. Securities obtained under a repo transaction, including through the Reserve Bank’s Liquidity Adjustment Facility, or borrowed under another GSL transaction shall also be eligible to be placed as collateral under a GSL transaction.
• It further states that The minimum tenor of a GSL transaction shall be one day and the maximum tenor shall be the maximum period prescribed to cover short sales in terms of the Directions on ‘Secondary Market Transactions in Government Securities – Short Selling’ dated July 25, 2018, as amended from time to time.
Kindly refer to the document to the document to view further details.
[Notification No. RBI/2023-24/97 FMRD.DIRD.No.05/14.03.061/2023-2024]
