RBI clarifies further on SLR bond measures, frames timeline
The Reserve Bank of India (RBI) on clarified further on its earlier measure, aimed at reducing bank financial losses due to fall in bond yields.
August 26, 2013 / 08:33 IST
Moneycontrol Bureau
The Reserve Bank of India (RBI) on clarified further on its earlier measure, aimed at reducing bank financial losses due to fall in bond yields.The RBI had allowed banks to hold Statutory Liquidity Ratio (SLR) bonds in the Held to Maturity (HTM) category at 24.5 percent of their respective total deposits or net demand and time liabilities (NDTL). Earlier the RBI had mandated to bring it down to 23 percent from 25 percent "in a progressive manner in a prescribed time frame".Also read: RBI issues fresh measures to bail out banks, mkts to rallyThe central bank on Friday elucidated that only SLR securities (bonds) should comprise the excess part (above 23 percent). It framed a timeline for banks to comply with 23 percent guideline.“The total SLR securities held in the HTM category is not more than 24.50 per cent by end June 2013, 24 percent by end September 2013, 23.50 percent by end December 2013, and 23.00 per cent by end March 2014 of their Demand and Time Liabilities (DTL) as on the last Friday of the second preceding fortnight,” RBI said in a release.Moreover, banks are now allowed to transfer Statutory Liquidity Ratio (SLR) bonds to HTM category from Available for Sale (AFS) or Held for Trading (HFT) categories up to the limit of 24.5 percent as one-time measure."Such transfer of securities from AFS/HFT category to HTM category should be made at the lower of the book value or market value. Banks have the option of valuing these securities for the purpose of such transfer as at the close of business of July 15, 2013," RBI had said earlier. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
