What changed
The transition period for banks to meet the requirements under the December 14, 2007 circular on loans to mutual funds and IPCs, previously extended to March 31, 2009, has been further extended to June 30, 2009. This follows a review of the earlier extension granted in December 2008.
What it means for you
Banks get an additional three months to align their lending practices to mutual funds and IPC issuance with RBI's capital market exposure guidelines. This provides temporary relief for banks that were still adjusting to the norms, but the deadline remains firm.
What you must do
- Ensure compliance with the December 14, 2007 circular requirements by June 30, 2009.
- Review current loan exposures to mutual funds and IPC practices to identify gaps.
- Prepare internal action plans to meet the revised deadline without further extensions.
Who it affects
All Scheduled Commercial Banks (excluding RRBs), Mutual Funds receiving loans from banks, Banks issuing Irrevocable Payment Commitments (IPCs)
What is the new deadline for compliance with the December 14, 2007 circular?
The transition period has been extended to June 30, 2009, from the earlier deadline of March 31, 2009.
Does this extension apply to all banks?
Yes, it applies to all Scheduled Commercial Banks, excluding Regional Rural Banks (RRBs).