Site icon SCC Times

Reserve Bank of India (Certificate of Deposit) Directions, 2021

Reserve Bank of India

Reserve Bank of India

On June 04, 2021, the Reserve Bank of India (RBI) has issued the Reserve Bank of India (Certificate of Deposit) Directions, 2021. These Directions shall come into force from June 07, 2021.

 

The following directions have been given:

 

    1. CDs shall be issued only in dematerialised form and held with a depository registered with Securities and Exchange Board of India.
    2. CDs shall be issued in minimum denomination of ₹5 lakh and in multiples of ₹5 lakh thereafter.
    3. The tenor of a CD at issuance shall not be less than seven days and shall not exceed one year.
    4. CDs shall be issued on a T+1 basis where T represents the date of closure of the offer period for issuance of the CDs.
    1. CDs shall be traded either in Over-the-Counter (OTC) markets, including on Electronic Trading Platforms, or on recognised stock exchanges with the approval of the Reserve Bank.
    2. The settlement cycle for OTC trades in CDs shall be T+0 or T+1.
    3. All secondary market transactions in CDs shall be settled on a DvP basis through the clearing corporation of any recognized stock exchange or any other mechanism approved by the Reserve Bank.

 

Note: Certificate of Deposit or CDs is a negotiable unsecured money market instrument issued by a bank as a Usance Promissory Note against funds deposited at the bank for a maturity period upto one year.

Exit mobile version