RBI/2004-05/133
UBD. NO. SUB. CIR. 2 /09.80.00/2004-05
August 19, 2004
The Chief Executive Officers of All
Scheduled Primary (Urban) Co-op. Banks
Dear Sir,
Transactions in Government Securities – DVP
III mode of settlement
Please refer to the instructions contained in
our circular BPD.SUB.CIR.
5 /09.80.00/2003-04 dated April 28, 2004 under which sale of government
securities already contracted for purchase was permitted provided certain conditions
stipulated therein were satisfied. To enable the implementation of this relaxation,
the settlement of government securities carried out through CCIL was shifted
to DVP-III mode.
2. We have since received enquiries from market
participants to clarify whether the revised regulations are applicable to Gilt
Account holders also, who hold their stock of government securities in Gilt
Accounts maintained with eligible custodians maintaining CSGL accounts in the
Public Debt Office of the Reserve Bank. It is clarified that, for the present,
the revised regulations contained in the above circular will not be applicable
to transactions of Gilt Account holders. Accordingly, Gilt Account holders are
not entitled to undertake any sale transaction unless the security sold is actually
held in the Gilt Account of the constituent. It is further clarified that the
relaxations permitted in the above circular are also not applicable when the
counter party in the purchase contract is a Gilt Account holder with the custodian
itself. You may please note the instructions for implementation while dealing
with Gilt Account holders.
3. Please acknowledge receipt to our concerned Regional Office.
Yours faithfully,
Sd/-
( N. S. Vishwanathan )
Chief General Manager
|