What changed
The Government of India issued a new General Notification (F.No.4(13)-W&M/2008) on October 8, 2008, superseding the earlier 1997 notification and its amendments. This notification consolidates general terms and conditions for all Government Securities, with specific details for each issue provided in separate Specific Notifications.
What it means for you
Banks and financial institutions must now refer to the updated General Notification for the baseline terms of Government Securities, including eligibility and application procedures. The new framework clarifies investment rules for NRIs, FIIs, and foreign central banks, ensuring compliance with FEMA. This streamlines issuance but requires banks to update their internal guidelines and training.
What you must do
- Review the new General Notification and replace references to the 1997 notification in your internal manuals.
- Update application procedures for Government Securities to align with RBI-specified electronic and physical formats.
- Ensure compliance with FEMA for investments by non-residents, including NRIs and FIIs, under the new eligibility criteria.
- Train treasury and compliance teams on the revised minimum subscription amount of Rs.10,000 and multiples thereof.
Who it affects
All Scheduled Commercial Banks (excluding RRBs), State Co-operative Banks, Scheduled Primary (Urban) Co-operative Banks, Financial Institutions, Primary Dealers and Satellite Dealers
What is the minimum subscription amount for Government Securities under the new notification?
The minimum subscription is Rs.10,000 (face value), and applications must be in multiples of Rs.10,000 thereafter.
Are NRIs and FIIs still eligible to invest in Government Securities?
Yes, NRIs and FIIs registered with SEBI and approved by RBI are eligible, subject to FEMA provisions and RBI-specified conditions.
Does this notification replace all previous general notifications?
Yes, it supersedes the 1997 General Notification and its amendments (1999 and 2002), consolidating terms into a single framework.