Brief Overview:
In the backdrop of adding depth and liquidity to the Government securities (“G-Secs”) market, the Reserve Bank of India has issued the draft directions on the G-Secs lending transactions.
Technical Details:
1) Eligibility: Entity eligible to undertake repo transactions in G-Secs may participate as lender of securities. Entity eligible to undertake short sale transactions in G-Secs may participate as borrower of securities.
2) Underlying: G-Secs issued by Central Government (excluding Treasury Bills).
3) Collateral: G-Secs issued by Central Government (including Treasury Bills), and the State Governments.
4) Tenure: To be undertaken for a minimum period of 1 day and a maximum period of 90 days.
5) Reporting & Settlement: To be settled on a Delivery vs Delivery basis & reported on the CCIL.
6) Documentation: To be entered into vide a standard bilateral master GSL agreement as per the documentation finalized by FIMMDA.
Comments on the draft directions are to be provided by 17th March 2023.
For further details, please see:
https://www.rbi.org.in/Scripts/bs_viewcontent.aspx?Id=4237
For any queries / clarifications, please feel free to ping us and we will be happy to chat:
Ms. Smrithi Nair (smrithi.nair@jclex.com)
Ms. Aashka Shah (aashka.shah@jclex.com)
Ms. Mahak Saboo (mahak.saboo@jclex.com)
