Mumbai:
The Reserve Bank of India (RBI) has told banks that, henceforth,
they may not invest in non-rated non-statutory liquidity
ratio (SLR) securities, and non-SLR securities of original
maturity of less than one year, other than commercial
papers and certificates of deposits.
The
RBI has said that not only must banks undertake usual
due diligence in respect of investments in non-SLR securities,
but also ensure that they do not finance credit facilities
for certain purposes that they have been prohibited from
doing so, by way of funds raised through non-SLR securities.
As
per the latest prudential guidelines, for banks' investment
in non-SLR securities, RBI has said that while making
fresh investments in non-SLR debt securities, banks should
ensure that such investment are made only in listed debt
securities of companies which comply with the Securities
and Exchange Board of India (SEBI) guidelines stipulating
full disclosures.
Banks'
investment in unlisted non-SLR securities should not exceed
10 per cent of the total investment in non-SLR securities
as on 31 March of the previous year. The unlisted non-SLR
securities in which banks may invest up to the limits
specified above should comply with the disclosure requirements
as prescribed by SEBI for listed companies, the apex bank
has said.
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