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RBI CIRCULAR
Banking Solution (E-Kuber) system on August 14, 2015. Provision of Factoring Services by Banks -
Bids in physical form will not be accepted except in Review
extraordinary circumstances. The non-competitive bids
should be submitted between 10.30 a.m. and 11.30 RBI/2015-16/140
a.m. and the competitive bids should be submitted be- DBR.No.FSD.BC.32/24.01.007/2015-16
tween 10.30 a.m. and 12.00 noon. July 30, 2015
(iv) An investor can submit more than one competitive bid All Scheduled Commercial Banks
at different prices in electronic format on the Reserve (excluding RRBs)
Bank of India Core Banking Solution (E-Kuber) system.
However, the aggregate amount of bids submitted by Dear Sir/Madam
a person in an auction should not exceed the notified 1. Please refer to circulars IECD.No.PMD.1/50/90-91 dated
amount of auction. July 2, 1990, IECD. No. OPMD.BC.9/50-90/91 dated August
30, 1990, DBOD .No .BC 18/24.01.001/93-94 dated
(v) On the basis of bids received, the Reserve Bank will February 19, 1994, IECD.No.44/08.12.01/94-95 dated April
determine the minimum price up to which tenders for 27, 1995 and DBOD.No.FSC.BC.49/24.01.001/97-98 dated
purchase of Government Stock will be accepted at the June 2, 1998 on provision of factoring services by banks. In
auctions. Bids quoted at rates lower than the minimum super cession of circulars IECD.No.PMD.1/50/90-91 dated
price determined by the Reserve Bank of India will be July 2, 1990, IECD.No.OPMD.BC.9/50-90/91 dated August
rejected. Reserve Bank of India will have the full dis- 30, 1990, IECD.No.44/ 08.12.01/94-95 dated April 27, 1995
cretion to accept or reject any or all bids either wholly and in partial modification of circular DBOD.No.BC.18/
or partially without assigning any reason. 24.01.001/93-94 dated February 19, 1994, and DBOD .No.
FSC. BC.49/24.01.001/97-98 dated June 2, 1998, we advise
(vi) The result of the auctions will be announced on August that banks may carry out the business of factoring
14, 2015 and payment by successful bidders will be on departmentally, without obtaining the prior approval of
August 17, 2015 (Monday). RBI, subject to the conditions.
(vii) The Government Stocks will be issued by credit to Sub- 2. Setting up of factor subsidiaries or investments by banks
sidiary General Ledger Account (SGL) of parties main- in factoring companies will be subject to extant guidelines
taining such account with Reserve Bank of India or in on investments by banks in subsidiaries and other
the form of Stock Certificate. Interest on the Govern- companies. Further, investment of a bank in the shares of
ment Stock will be paid half-yearly. factoring companies inclusive of its subsidiary carrying on
factoring business shall not, in the aggregate, exceed 10%
(viii) The Government Stocks will be repaid at par on De- of the paid up capital and reserves of the bank.
cember 15, 2023; May 25, 2025; November 10, 2033
and June 22, 2045 respectively. 3. Subsidiaries and JVs of banks, including the existing ones
would be regulated as NBFC-Factors vide circular DNBS(PD)CC
(ix) The Stocks will qualify for the ready forward facility. No.297/Factor/22.10.91/2012-13 dated July 23, 2012.
(x) The Stocks will be eligible for "When Issued" trading during Yours faithfully
the period August 11, 2015 - August 14, 2015 in (Lily Vadera)
accordance with guidelines on 'When Issued' transactions Chief General Manager
in Central Government Securities issued by Reserve Bank
of India vide circular No.RBI /2006-07/178 dated November
16, 2006 as amended from time to time.
Yours faithfully
(P K Pati)
General Manager
BANKING FINANCE | SEPTEMBER | 2015 | 55
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