Valuation of Non-SLR Govt Securities for Co-op Banks
No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2007-2008/376 · issued 23 Jun 2008 · ~2 min read
Quick answerRBI reduced the valuation spread on non-SLR special government securities held by co-operative banks from 50 bps to 25 bps above corresponding G-sec yields, effective FY 2008-09.
What changed
Earlier, FIMMDA guidelines required non-SLR special securities to be valued at a 50 bps mark-up over comparable G-sec yields. RBI has now reduced this spread to 25 bps for valuation purposes, effective from the 2008-09 financial year. The change applies only to special securities issued directly to beneficiary entities that lack SLR status.
What it means for you
Co-operative banks holding these illiquid special securities will see a lower valuation discount, improving their reported portfolio values. This reduces the hit to capital and provisioning requirements for such holdings. However, the securities remain non-SLR and illiquid, so banks must still manage liquidity risk carefully.
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
Revalue all non-SLR special securities (e.g., Oil Bonds, Fertilizer Bonds) using the new 25 bps spread from FY 2008-09 onwards.
Update internal valuation models and reporting systems to reflect the revised spread.
Ensure compliance with FIMMDA guidelines as amended by this circular for all affected securities.
Monitor the list of eligible special securities and confirm SLR status for each holding.
Who it affects
State Co-operative Banks, Central Co-operative Banks, Treasury and investment departments of co-operative banks, Auditors and compliance teams handling bank portfolios
❓ Common questions
Regulatory timeline
Decoded by BankPulse2026-06-19 13:43 IST
repealed_by — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
Status change: withdrawn05 Aug 2026, 04:00 IST
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
Which securities are covered under this circular?
The circular covers special securities issued directly by the Government of India to beneficiary entities that do not qualify for SLR. Examples include Oil Bonds, Fertilizer Bonds, bonds to SBI (rights issue), UTI, IFCI, FCI, IIBI, erstwhile IDBI, and erstwhile SDFC.
Does this change affect SLR compliance?
No. These securities remain non-SLR and cannot be used to meet statutory liquidity ratio requirements. The circular only changes the valuation spread for accounting purposes.
When does the new valuation spread take effect?
The revised spread of 25 bps applies from the financial year 2008-09 onwards.
📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Repealed byRBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
RBI’s words: “Official withdrawal register entry #2218: RPCD.CO.RF.BC.No.79/07.02.03/2007-08 — "Valuation of Non-SLR Securities Issued by the Government of India" dated June 23, 2008”
📜 Read the original circular — full text as issued by RBI
RBI/2007-2008/376
RPCD.CO.RF.BC.No.79 /07.02.03/2007-08
June 23, 2008
The Chairmen/Chief Executives of all
State and Central Co-operative Banks
Dear Sir,
Valuation of Non-SLR securities issued by the Government of India
Please refer to our circular RPCD.No.BC.154/07.02.08/94-95 dated May 23, 1995 on 'Investment Portfolio of Banks –Transactions in Securities'.
2. It has been observed that, over the years, the Government of India has, from time to time, issued several special securities which do not qualify for the purpose of complying with the SLR requirements of State / Central co-operative banks. Such Government securities are governed by a separate set of terms and conditions and entail a higher degree of illiquidity spread. Currently, the guidelines issued by FIMMDA regarding the valuation of such non-SLR securities provide that such securities be valued by applying a mark-up of 50 basis points (bps) above the corresponding yield on Government of India securities.
3. The issue of valuation of such special securities has since been examined. It has been decided that, for the limited purpose of valuation, all special securities issued by the Government of India, directly to the beneficiary entities, which do not carry SLR status, may be valued at a spread of 25 bps above the corresponding yield on Government of India securities. This amendment would come into force from the financial year 2008-09.
4. It may be noted, that at present, such special securities comprise: Oil Bonds, Fertilizer Bonds, bonds issued to the State Bank of India (during the recent rights issue), Unit Trust of India, Industrial Finance Corporation of India Ltd., Food Corporation of India, Industrial Investment Bank of India Ltd., the erstwhile Industrial Development Bank of India and the erstwhile Shipping Development Finance Corporation.
Yours faithfully,
(G. Srinivasan)
Chief General Manager-in-Charge
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2007-2008/376 · issued 23 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=4250&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.
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