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RBI/2017-2018/188
FMOD.MAOG No.125/01.01.001/2017-18
June
6, 2018
All Scheduled Commercial Banks
(Excluding Regional Rural Banks),
Scheduled Urban Co-operative Banks and
Standalone Primary Dealers
Madam/Sir,
Review
of margin requirements under the Liquidity Adjustment Facility and Marginal
Standing Facility
Please refer to the circulars FMD.MOAG No.77/01.01.001/2012-13 dated March
19, 2013 and FMOD.MAOG
No.117/01.01.001/2016-17 dated November 25, 2016.
2. Currently, the margin
requirements under the Liquidity Adjustment Facility (Repo) and Marginal
Standing Facility (MSF) in respect of Treasury Bills/Central Government
dated securities (including Oil Bonds) and State Development Loans (SDLs)
stand at 4 per cent and 6 per cent, respectively.
3. As announced in the Second Bi-monthly Monetary Policy Statement for 2018-19,
it has now been decided to assign margin requirement on the basis of
residual maturity of the collateral, i.e., the Treasury Bills, Central
Government dated securities (including Oil Bonds) and State Development
Loans (SDLs). Further, it has also been decided that the margin requirement
for rated SDLs shall be 1 per cent lower than that of unrated SDLs for the
same maturity bucket. The revised margin requirements for Central
Government Securities and SDLs being offered as collateral would be as
given in the table below:
|
Category
of Collateral
|
Residual
Maturity of Collateral
|
|
0-1
year
|
1-5
years
|
5-10
years
|
10-15
years
|
>
15 years
|
|
Treasury Bills and Central
Government Dated Securities (including Oil Bonds)
|
0.5%
|
1%
|
2%
|
3%
|
4%
|
|
SDLs (unrated)
|
2.5%
|
3%
|
4%
|
5%
|
6%
|
|
SDLs (rated)
|
1.5%
|
2%
|
3%
|
4%
|
5%
|
4. The revised margin
requirements would come into force with effect from August 1, 2018. All
other terms and conditions of the current LAF (Repo) and MSF schemes will
remain unchanged.
Yours sincerely
(Radha Shyam Ratho)
Chief General Manager
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