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RBI Extends Transition Period for Capital Market Exposure Norms

No longer current — withdrawn, no replacement on file yet

Source: Reserve Bank of India · RBI/2007-08/359 · issued 09 Jun 2008 · ~1 min read

Quick answerRBI has extended the transition period for banks to comply with capital market exposure norms related to loans to mutual funds and IPCs by three months, now up to September 13, 2008.

What changed

The earlier circular (December 14, 2007) had provided a six-month transition period ending around June 2008. RBI has now extended this by another three months, giving banks until September 13, 2008 to fully comply with the requirements.

What it means for you

Banks get additional time to adjust their lending practices to mutual funds and issuance of IPCs to meet the capital market exposure guidelines. This extension helps banks avoid immediate compliance pressure and manage their exposure more smoothly.

Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.

What banks were required to do at the time

Review your bank's current exposure to mutual funds and IPCs against the new deadline of September 13, 2008.
Ensure internal systems and processes are updated to comply with the capital market exposure norms by the extended date.
Communicate the revised timeline to relevant departments handling capital market lending.
Monitor any further RBI guidance on this matter to stay compliant.

Who it affects

All scheduled commercial banks (excluding RRBs), Bank treasury and credit departments handling capital market exposures, Mutual funds and entities relying on bank loans or IPCs

❓ Common questions

Regulatory timeline

Decoded by BankPulse 2026-06-19 13:51 IST
repealed_by — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
Status change: withdrawn 05 Aug 2026, 04:00 IST

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

What is the new deadline for compliance with capital market exposure norms?

The transition period has been extended by three months, so banks must comply by September 13, 2008.

Does this extension apply to all banks?

Yes, it applies to all scheduled commercial banks, but regional rural banks (RRBs) are excluded from this circular.

What happens if a bank does not comply by the new deadline?

The circular does not specify penalties, but banks should aim to comply by September 13, 2008 to avoid potential regulatory action.

📜 This document’s life story (1 recorded event, each backed by RBI’s own words)

Repealed by RBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)

RBI’s words: “Official withdrawal register entry #2229: DBOD.No.Dir.BC.92/13.03.00/2007-08 — "Banks' Exposure to Capital Market - Loans Extended by Banks to Mutual Funds and Issue of Irrevocable Payment Commitments”

📜 Read the original circular — full text as issued by RBI

RBI/2007-08/359
 DBOD.No.Dir.BC. 92/13.03.00/2007-2008
 June 9, 2008
 All Scheduled Commercial Banks 
 (excluding RRBs) 
 Dear Sir
 Banks’ Exposure to Capital Market – 
 Loans extended by banks to Mutual Funds and 
 Issue of Irrevocable Payment Commitments (IPCs) 
 Please refer to paragraph 4 of our circular No.DBOD.Dir.BC.57/13.03.00/2007-2008 dated December 14, 2007 , in terms of which a transition period of six months from the date of the circular was provided to enable banks to comply with the requirements contained in the above circular. On a review of the matter, it has been decided to extend the transition period to comply with the requirements contained in the above circular by another three months, i.e.,  up to September 13, 2008.
 Yours faithfully
 (P.Vijaya Bhaskar) 
 Chief General Manager

Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2007-08/359 · issued 09 Jun 2008. The plain-English explanation above is BankPulse’s own independent summary.

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BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=4228&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.