FMOD.MAOG No. 117/01.01.001/2016-17
All Scheduled Commercial Banks
Scheduled Urban Co-operative Banks and
Standalone Primary Dealers
Liquidity Adjustment Facility –
Oil Marketing Companies’ Government of India Special Bonds (Oil Bonds) as
eligible collateral under LAF/MSF and Removal of Margin Requirement for
Please refer to our circular IDMD.OMO No. 04/03.75.00/2003-04 dated March
25, 2004 on Liquidity Adjustment Facility Scheme.
2. It has been decided that the
Oil Bonds issued by Government of India will qualify as eligible securities
for Repos, Reverse Repos and Marginal Standing Facility (MSF). The E-Kuber
system will now accept Oil Bonds as eligible collateral for the above
2.1 There will be no change in
the prevailing Non-SLR status of the Oil Bonds.
3. Further, it has been decided
to do away with the margin requirement for the securities provided by
Reserve Bank of India as collateral to the successful participants in
Reverse Repo operations (including Term Reverse Repos).
3.1 However, margin requirements
shall continue as hitherto in respect of all Repo/MSF transactions. A
margin of 4 per cent will be applied in respect of Oil Bonds, i.e. a Repo
bid of ? 100 will have to be backed by ? 104 of Oil Bonds.
4. The above stated changes will
come into effect from November 28, 2016 and remain applicable till further
5. All other terms and
conditions for LAF/MSF remain as notified by our earlier circulars.
(Radha Shyam Ratho)
Chief General Manger