Page 60 - Banking Finance July 2025

RBI CIRCULAR

more sub-sectors under the PSL where it has competi- August 07, 2019 on the proposal to introduce strip-
tive advantage. ping/reconstitution facility for State Development
Loans1 (SDLs), in consultation with the respective State
Revised provisions
2. On a review, it has been decided that financial year Governments.
2025-26 onwards, the additional component (35 per 2. Based on consultation with the individual State Gov-
cent) of PSL shall be reduced to 20 per cent, thereby ernments/Union Territories and the feedback received
making the overall PSL target as 60 per cent of ANBC from market participants, it has been decided to intro-
or Credit Equivalent of Off-Balance Sheet Exposures duce Separate Trading of Registered Interest and Prin-
(CEOBE), whichever is higher. The SFB shall continue cipal of Securities (STRIPS) in State Government Secu-
to allocate 40 per cent of its ANBC or CEOBE, which- rities (SGS). This will be in addition to stripping/recon-
ever is higher, to different sub-sectors under PSL as per stitution already permitted since April 1, 2010 in eli-
the extant PSL prescriptions, while the balance 20 per gible Central Government dated securities. The related
cent shall be allocated to any one or more sub-sectors notification dated May 29, 2025, published in the Of-
under the PSL where the bank has competitive advan- ficial Gazette, is enclosed.
tage.
3. Eligible securities
3. These instructions are issued in exercise of the pow- All fixed coupon securities issued by State Govern-
ers conferred on the Reserve Bank of India under Sec- ments/Union Territories having a residual maturity of
tion 22 (1) of the Banking Regulation Act, 1949. up to 14 years and minimum outstanding of ?1,000
crore as on the day of stripping, provided that such
Import of Shipping Vessel - Relaxation securities are reckoned as eligible investment for the
purpose of meeting Statutory Liquidity Ratio (SLR) re-
June 13, 2025
quirements and are transferable.
1. Attention of Authorised Dealer (AD) Category - I banks 4. Placing of Request
is invited to Para C.1 of Master Direction – Import of (a) Market Participants having an SGL account with
Goods and Services (MD-Imports) dated January 01, the Reserve Bank can place requests directly in
2016.
Reserve Bank of India Core Banking Solution (e-
2. With a view towards enhancing ease of doing business Kuber system) for stripping / reconstitution.
and keeping in view the sector-specific constraints, it (b) Request for stripping / reconstitution by Gilt Ac-
has been decided to allow importers to make advance count Holders shall be placed with their respec-
remittance for import of shipping vessel, without bank tive custodians maintaining the CSGL account with
guarantee, or an unconditional, irrevocable standby
the Reserve Bank and the custodians, in turn, will
Letter of Credit, up to USD 50 million, subject to the
place the request on behalf of their constituents
conditions mentioned in para-C.1.3.3 of MD-Imports, in e-Kuber.
as applicable.
5. Nomenclature
3. AD banks may bring the contents of this circular to
the notice of their constituents concerned. ISIN and nomenclature for STRIPS in SGS, will be simi-
lar to STRIPS in Central Government dated securities.
4. The directions contained in this circular have been is- An illustration in this regard is given at Annex.
sued under Section 10(4) and Section 11(1) of the
FEMA, 1999 (42 of 1999) and are without prejudice to 6. All other terms and conditions as set out in the RBI No-
permissions / approvals, if any, required under any tifications dated October 16, 2009 and April 10, 2018
other law. shall apply, mutatis mutandis, to stripping/ reconstitu-
tion in SGS. Further, the guidelines on stripping /recon-
Stripping/Reconstitution in State Government stitution of Government Securities as contained in our
Securities circular dated March 25, 2010 and any other circular
referred to therein, as amended from time to time,
June 12, 2025 shall also apply to stripping/ reconstitution in SGS.

1. Please refer to paragraph No.1 of the Statement on 7. The stripping/ reconstitution in SGS shall come into ef-
Developmental and Regulatory Policies announced on fect from the date of this circular.

54 | 2025 | JULY | BANKING FINANCE