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Corporate Laws Central Ministry of Finance Reserve Bank of India Act, 1934

Reserve Bank of India (Government Securities Lending) Directions, 2023

27-Dec-2023 | RBI/2023-2024/97 FMRD.DIRD.No.05/14.03.061/2023-2024

RBI has issued Reserve Bank of India (Government Securities Lending) Directions, 2023.

Key Highlights:-

1. Eligible securities:-

i) Government securities issued by the Central Government excluding Treasury Bills shall be eligible for lending/borrowing under a GSL transaction.
ii) 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

2. Eligible participants:-

i) An entity eligible to undertake repo transactions in Government securities in terms of the Repurchase Transactions (Repo) (Reserve Bank) Directions, 2018 dated July 24, 2018, as amended from time to time.
ii) Entities that are eligible to undertake short sale transactions in terms of Short Sale (Reserve Bank) Directions, 2018 dated July 25, 2018, as amended from time to time, shall be eligible to borrow securities under a GSL transaction.

3. Tenor:- 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.

4. Trading process/platform- GSL transactions may be contracted using any mutually agreed trading process/platform, including but not limited to, bilateral or multilateral, quote driven or order driven process, anonymous or otherwise.

5. Reporting of trades:-

(i) All GSL transactions shall be reported to the CCIL, or any other agency approved by the Reserve Bank for the purpose, within 15 minutes of execution, by both counterparties to the transaction or by the ETP operator concerned, as the case may be.

(ii) Any misreporting or multiple reporting of the same OTC market deal by a counterparty shall be immediately brought to the notice of CCIL or the agency referred to in para 10(1) of the directions.

For detailed directions please refer the attachment.

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