RBI.No.2006-07/228
DBOD. Dir. BC.51/13.03.00/ 2006-07
January 9, 2007
All Scheduled Commercial Banks
(excluding RRBs)
Dear Sir
Banks' Exposure to Commodity Markets – Margin Requirements
Please refer to paragraph 2.9 of our Master
Circular No. DBOD. Dir. BC. 17/13.03.00/2006-07 dated July 1, 2006 on 'Guarantees
and Co-acceptances' in terms of which banks may issue guarantees on behalf of
share and stock brokers in favour of stock exchanges in lieu of margin requirements
as per stock exchange regulations. While issuing such guarantees banks should
obtain a minimum margin of 50 percent. A minimum cash margin of 25 percent (within
the above margin of 50 percent) should be maintained in respect of such guarantees
issued by banks.
2. It is clarified that the above minimum margin of 50 percent
and minimum cash margin requirement of 25 percent (within the margin of 50 percent)
will also apply to guarantees issued by banks on behalf of commodity brokers
in favour of the national level commodity exchanges, viz., National Commodity
& Derivatives Exchange (NCDEX), Multi Commodity Exchange of India Limited
(MCX) and National Multi-Commodity Exchange of India Limited (NMCEIL), in lieu
of margin requirements as per the commodity exchange regulations.
Yours faithfully
(P Vijaya Bhaskar)
Chief General Manager
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