RBI/2013-2014/226
UBD.BPD. (PCB). Cir.No.9/09.29.000/2013-14
September 4, 2013
The Chief Executive Officers of
All Primary (Urban) Co-operative Banks
Madam/Dear Sir,
Secondary Market Transactions in Government Securities – Intra-day short selling
Please refer to our circular UBD.BPD.PCB.Cir.39/09.29.00/2002-03 dated March 13, 2003, in terms of which Urban Co-operative Banks were permitted to trade in Government Securities on the Stock Exchanges, but were not permitted to undertake short selling of Government securities, even on an intra-day basis.
2. It has been decided to permit well managed Urban Co-operative Banks, who are members of NDS-OM and have regular concurrent audit of their treasury operations, to undertake intra-day short selling of Government Securities. Accordingly, Urban Co-operative Banks, fulfilling the following conditions are required to seek permission from the Regional Offices concerned to undertake such transactions.
- NDS-OM Membership.
- Net Worth of ` 25 crore, CRAR of 9% or more and net NPA of not more than 3%.
- Sound risk management practices and mandatory concurrent audit of their Treasury Operations.
3. Urban Co-operative Banks are advised to adhere to the instructions/directions as prescribed by Internal Debt Management Department of Reserve Bank of India for intra-day short selling of Government Securities from time to time.
Yours faithfully,
(A.K.Bera)
Principal Chief General Manager
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