RBI issued the Reserve Bank of India (Government Securities Lending) Directions, 2023
The following has been stated namely
These Directions shall be applicable to all Government securities lending transactions, undertaken in Over-the-Counter markets.
It states that 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 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 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 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 state 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.
These Directions shall come into immediate effect.
Link – https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12580&Mode=0
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