What changed
Earlier, same-day sale of government securities allotted in primary issues was allowed only between entities with SGL accounts settled under RBI's DVP system. Now, RBI has extended this facility to CSGL constituent account holders as well, with immediate effect from the date of this circular (July 13, 2005).
What it means for you
Co-operative banks holding CSGL accounts can now trade government securities on the allotment day itself, improving liquidity and enabling faster portfolio adjustments. This move deepens the government securities market by including more participants, potentially increasing trading volumes and market efficiency.
What you must do
- Update internal systems to process same-day sale of G-secs for CSGL accounts.
- Train treasury staff on the new CSGL sale facility and DVP settlement procedures.
- Review and amend any internal policies that previously restricted same-day sales to SGL holders only.
- Ensure compliance with all other unchanged instructions on primary issue securities sales.
Who it affects
All State and District Central Co-operative Banks, CSGL constituent account holders
Can we sell G-secs on allotment day if we only have a CSGL account?
Yes, as per this circular, CSGL account holders are now permitted to sell government securities allotted in primary issues on the same day of allotment, both with and between other CSGL holders.
Does this change affect any other rules for primary issue securities?
No, all other instructions on sale of securities allotted in primary issues on the same day remain unchanged. Only the eligibility for same-day sale has been extended to CSGL holders.