RBI/2004/69 RPCD.CO.RF.BC.65/07.02.03/2003-04 February 23, 2004
The Chairman /CEOs of all
State and Central Co-operative Banks
Dear Sir,
Prudential guidelines on investment in non-SLR
debt securities
Please refer to our circular RPCD.CO.RF.BC.No.93/07.37.02/2001-02
dated May 6, 2002 regarding investment portfolio of banks. As you are aware,
State Co-operative Banks and District Central Co-operative Banks are permitted
to invest their genuine non-SLR surplus funds in certain avenues subject to
the terms and conditions laid down from time to time. Paragraph 133 of the Statement
on Monetary and Credit Policy for the year 2002-03 emphasized that banks should
observe further prudence in order to contain the risk arising out of their non-SLR
investment portfolio.
2. SEBI has since advised the guidelines required
to be complied with by listed companies making issue of debt securities on a
private placement basis and listed on a stock exchange, vide circular SEBI/MRD/SE/AT/36/2003/30/9
dated September 30, 2003.
3. In order to contain the risks arising out
of non-SLR investment portfolio of banks, in particular through private placement,
the guidelines on banks’ investment in non-SLR debt securities are furnished
in the Annexure. These guidelines come into force with immediate effect and
have to be fully complied with by March 31, 2004.
4. You are advised to place the contents of
this circular together with its enclosures before the Board of your bank.
5. Please acknowledge receipt to our concerned
Regional Office.
Yours faithfully,
(C.S. Murthy)
Chief General Manager In-charge
Encls: As above
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