Saturday, April 30, 2016

Risk Weight in respect of investments in Corporate Bonds by Standalone Primary Dealers (SPDs)


It has been decided to link the risk weights, assigned by SPDs to their investments in corporate bonds, to the rating of the bonds as under:

A.   Short term instruments (bonds ≤ 1 year maturity)
CARE
CRISIL
INDIA RATING
ICRA
BRICKWORK
SMERA
RISK WT
CARE A1+
CRISIL A1+
IND A1+
ICRA A1+
Brickwork A1+
SMERA A1+
20
CARE A1
CRISIL A1
IND A1
ICRA A1
Brickwork A1
SMERA A1
30
CARE A2
CRISIL A2
IND A2
ICRA A2
Brickwork A2
SMERA A2
50
CARE A3
CRISIL A3
IND A3
ICRA A3
Brickwork A3
SMERA A3
100
CARE A4&D
CRISIL A4&D
IND A4&D
ICRA A4&D
Brickwork A4&D
SMERA A4&D
150
Unrated
Unrated
Unrated
Unrated
Unrated
Unrated
100

B.    Long term instruments (bonds > 1 year maturity)
Rating
AAA
AA
A
BBB
BB
Unrated
Risk Weight
20
30
50
100
150
100

The above shall be applicable with immediate effect.
Based on the RBI notification dated 28/04/2016. Please refer www.rbi.org.in in case of any further clarification………….. Poppy



Opening and Maintenance of Rupee / Foreign Currency Vostro Accounts of Non-Resident Exchange Houses: Rupee Drawing Arrangement



To streamline the remittance under the Speed Remittance Procedure and make it cost-effective, it has now been decided to do away with the requirement of maintaining collateral or cash deposits by the Exchange Houses with whom the banks have entered into the Rupee Drawing Arrangement.
The AD banks are free to determine the collateral requirement, if any, based on factors and may frame their own policy in this regard :
whether the remittances are pre-funded,
the track record of the Exchange House,
whether the remittances are effected on gross or net basis, etc.
Based on the RBI notification dated 28/04/2016. Please refer www.rbi.org.in in case of any further clarification………….. Poppy

F-TRAC – Counterparty Confirmation



It has been decided to allow entities reporting trades on F-TRAC to enter into multilateral agreement drafted by the Fixed Income Money Market and Derivatives Association (“FIMMDA”) for waiving physical exchange of confirmation for the deals in Commercial Papers (CPs), Certificates of Deposit (CDs), Non-Convertible Debentures (NCDs) of original maturity up to one year and repo trades in corporate debt securities, CPs and CDs.

The list of entities, which have signed the multilateral agreement, will be published by FIMMDA and the Clearing Corporation of India Limited (CCIL) on their websites.
Based on the RBI notification dated 28/04/2016. Please refer www.rbi.org.in in case of any further clarification………….. Poppy


Compliance with Jilani Committee Recommendations



It has now been decided that, henceforth, the compliance to the Jilani Committee recommendations need not be reported to the Audit Committee of the Board of Directors (ACB) . However, banks should ensure that:
i)     Compliance to these recommendations are complete and sustained,
ii)  These recommendations are appropriately factored in the internal inspection/audit processes of banks and duly documented.
Based on the RBI notification dated 28/04/2016. Please refer www.rbi.org.in in case of any further clarification………….. Poppy