RBI/2013-14/79
DBOD.No.FID.FIC.3/01.02.00/2013-14
July 1, 2013
The CEOs of the
All-India Term Lending and Refinancing Institutions
(Exim Bank, NABARD, NHB and SIDBI)
Dear Sir,
Master Circular – Prudential Norms for Classification,
Valuation and Operation of Investment Portfolio by FIs
Please refer to Master Circular DBOD.No.FID.FIC.3/01.02.00/2012-13 dated July 02, 2012 on the captioned subject. The enclosed Master Circular consolidates and updates all the instructions / guidelines on the subject up to June 30, 2013. The Master Circular has also been placed on the web-site of RBI (http://www.rbi.org.in).
2. It may be noted that the instructions contained in circulars listed in the Annex VIII have been consolidated in this master circular.
Yours faithfully,
(Rajesh Verma)
Chief General Manager
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Master Circular – Prudential Norms for Classification,
Valuation and Operation of Investment Portfolio by FIs
Purpose
To provide a consolidated set of guidelines on Classification, Valuation and Operation of Investment Portfolio to all-India term-lending and refinancing institutions.
Previous instructions
The list of circulars containing previous instructions on the above subject is given in Annex VIII.
Application
To all the all-India Financial Institutions viz. Exim Bank, NABARD, NHB and SIDBI.
Structure
|
1 |
Introduction | |
|
2 |
Investment Policy | |
|
2.1 |
Objectives of Investments | |
|
2.2 |
Ready Forward Contracts | |
|
2.3 |
Transaction / Trading in Government Securities | |
|
2.4 |
Bank Receipts | |
|
2.5 |
Investments in Non-Government Debt Securities | |
|
3 |
Internal Control System | |
|
3.1 |
Guidelines for Internal Control System | |
|
3.2 |
Dealing through brokers | |
|
3.3 |
Audit, review and reporting of investment transactions | |
|
3.4 |
Monitoring of subsidiaries / mutual funds | |
|
4 |
Classification of Investments | |
|
4.1 |
Three Categories | |
|
4.2 |
Decision of category at the time of acquisition | |
|
4.3 |
Held to Maturity | |
|
4.4 |
Available for Sale & Held for Trading | |
|
4.5 |
Shifting among categories | |
|
5 |
Valuation of Investments | |
|
5.1 |
Held to Maturity | |
|
5.2 |
Available for Sale | |
|
5.3 |
Held for Trading | |
|
5.4 |
General | |
|
5.5 |
Market Value | |
|
5.6 |
Valuation of unquoted securities | |
|
6 |
Conversion of Debt into Equity and Other Instruments in Case of Restructured Accounts | |
|
7 |
Hedging of investments with Exchange Traded Interest Rate Derivatives | |
|
8 |
Repo Accounting | |
|
8.1 |
Coupon | |
|
8.2 |
Repo Interest Income / Expenditure | |
|
8.3 |
Marking to Market | |
|
8.4 |
Book value on Re-purchase | |
|
8.5 |
Disclosure | |
|
8.6 |
Accounting Methodology | |
| Annex – I | ||
| Annex – II | ||
| Annex – III | ||
| Annex – IV | ||
| Annex – V | ||
| Annex VI | ||
| Annex VII | ||
| Annex – VIII | ||
