Netting Benefit Extended to HSBC Primary Dealership for Reserve Requirements

RBI/2004-05/291 DBOD.No.Ret.BC.59/12.01.001/2004-05 December 3, 2004 All Scheduled Commercial Banks (Excluding Regional Rural Banks & Local Area Banks) Dear Sir Bank’s lending to Primary Dealers - Netting Concept for Reserve requirements Please refer to our circular letter DBOD.No.Ret.BC.6/12.01.001/2003-04 dated July 23, 2003 advising banks that they can derive the benefit of netting of assets and liabilities in respect of their dealing with Standard Chartered - UTI Securities India Private Ltd., Banc of America Securities (India) Pvt. Ltd. and Citicorp Capital Markets Ltd. 2. HSBC Primary Dealership (India) Private Limited has been permitted to participate both as lender and borrower in Call/Notice/Term Money market and Bills Rediscounting Scheme with effect from May 25, 2001. 3. In order to enable banks to get the benefit of netting in respect of their lendings/borrowings to the above-mentioned Primary Dealer, the Government of India have, on the recommendation of Reserve Bank of India, notified the above Primary Dealer as a financial institution for the purpose of item (vi) of Clause (d) of Explanation to Sub-section (1) of Section 42 of the Reserve Bank of India Act, 1934 as also Clause (d) of Explanation to the Sub-section 1 of Section 18 read with Clause (j) of Section 56 of the Banking Regulation Act, 1949 (10 of 1949). Necessary notifications dated March 21, 2003 have been published in Part II, Section 3(ii) of Gazette of India (copies enclosed). In view of the above notifications, banks can derive the benefit of netting of the assets and liabilities in respect of their dealings with HSBC Primary Dealership (India) Private Ltd. Please acknowledge receipt. Yours faithfully (T. B. Satyanarayan) General Manager (To be published in Part II Section 3 (II) of the Gazette of India) F.No.13/5/2003-BOA (I) Government of India Ministry of Finance Department of Economic Affairs Banking Division New Delhi, the 21 st March 2003 1924 Saka NOTIFICATION In exercise of the powers conferred by item (vi) of clause (d) of Explanation to sub-section (1) of Section 42 of the Reserve Bank of India Act, 1934 (2 of 1934), the Central Government hereby notifies the entity known as HSBC Primary Dealership (India) Private Limited being company registered under the Companies Act, 1956 (1 of 1956) as financial Institution for the purpose of the aforesaid clause. Sd/- (D. Choudhury) Under Secretary to the Govt. of India To The Manager Government of India Press Mayapuri Industrial Area Ring Road New Delhi (To be published in Part II Section 3 (II) of the Gazette of India) F.No.13/5/2003-BOA (I) Government of India Ministry of Finance Department of Economic Affairs Banking Division New Delhi, the 21 st March 2003 30 Phalguna1924 Saka NOTIFICATION In exercise of the powers conferred by clause (d) of Explanation to sub-section (1) of Section 18 read with clause (j) of Section 56 of the Banking Regulation Act, 1949 (10 of 1949), the Central Government hereby notifies the entity known as HSBC Primary Dealership (India) Private Limited being company registered under the Companies Act, 1956 (1 of 1956) as financial Institution for the purpose of the aforesaid clause. Sd/- (D. Choudhury) Under Secretary to the Govt. of India To The Manager Government of India Press Mayapuri Industrial Area Ring Road New Delhi

Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2004-05/291 · issued 03 Dec 2004. The plain-English explanation above is BankPulse’s own independent summary.

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