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RBI Extends Transition Period for Bank Loans to MFs and IPCs

No longer current — withdrawn, no replacement on file yet

Source: Reserve Bank of India · RBI/2008-09/510 · issued 25 Jun 2009 · ~1 min read

Quick answerRBI has extended the transition period for banks to comply with capital market exposure norms for loans to mutual funds and IPCs from June 30, 2009 to December 31, 2009, giving lenders six more months to adjust.

What changed

The transition period for banks to meet the requirements on loans to mutual funds and issuance of Irrevocable Payment Commitments (IPCs) was extended from June 30, 2009 to December 31, 2009. This follows a previous extension granted in March 2009.

What it means for you

Banks get additional time to align their lending practices to mutual funds and IPC issuance with RBI's capital market exposure guidelines. This provides operational relief and avoids immediate compliance pressure, but the deadline is now fixed at year-end 2009.

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 current loan exposures to mutual funds and IPC issuance against the December 2007 circular requirements.
Ensure full compliance with the capital market exposure norms by December 31, 2009.
Update internal systems and reporting processes to track the transition deadline.
Communicate the revised timeline to relevant business and risk management teams.

Who it affects

All scheduled commercial banks (excluding RRBs), Bank treasury and credit departments handling mutual fund lending, Banks issuing Irrevocable Payment Commitments

❓ Common questions

Regulatory timeline

Decoded by BankPulse 2026-06-19 10:00 IST
repealed_by — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
Status change: withdrawn 03 Aug 2026, 04:00 IST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 the capital market exposure norms for loans to MFs and IPCs?

The transition period has been extended to December 31, 2009, from the earlier June 30, 2009 deadline.

Which banks are covered by this circular?

All scheduled commercial banks, excluding Regional Rural Banks (RRBs), are required to comply.

What happens if banks do not comply by the new deadline?

The circular does not specify penalties, but banks must ensure full compliance by December 31, 2009, as per the earlier December 2007 guidelines.

📜 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 #1912: DBOD.No.Dir.BC.139/13.03.00/2008-2009 — "Banks' Exposure to Capital Market - Loans extended by Banks to Mutual Funds and Issue of Irrevocable Payment Commitme”

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

RBI/2008-09/510
DBOD.No.Dir.BC. 139 /13.03.00/2008-2009
 June 25, 2009
 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 our circular No.DBOD.Dir.BC.119/13.03.00/2008-2009 dated March 30, 2009 in terms of which the transition period allowed to banks to comply with the requirements contained in our circular No.DBOD.Dir.BC.57/ 13.03.00/2007-2008 dated December 14, 2007, was extended up to June 30, 2009. On a review, it has been decided to further extend the transition period up to December 31, 2009 .

 Yours faithfully
 (P Vijaya Bhaskar)
 Chief General Manager-in-Charge

Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2008-09/510 · issued 25 Jun 2009. The plain-English explanation above is BankPulse’s own independent summary.

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BankPulse Compliance Evidence Pack — generated 03 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=5053&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.