What changed
RBI issued a notification on September 1, 2009, clarifying that Cash Management Bills issued by the Government of India will be treated as Treasury Bills under clause (c)(ii) of the earlier notification dated February 13, 2008. This means these bills are now explicitly included as SLR securities for scheduled commercial banks.
What it means for you
Banks can now count Cash Management Bills towards their SLR requirements, providing an additional instrument for liquidity management. This expands the pool of eligible securities, potentially easing SLR compliance and offering more flexibility in asset-liability management.
What you must do
- Update internal SLR compliance systems to include Cash Management Bills as eligible securities.
- Review investment policies to consider Cash Management Bills for SLR portfolio allocation.
- Train treasury and compliance teams on the new eligibility for accurate reporting.
Who it affects
All Scheduled Commercial Banks (excluding Regional Rural Banks), Treasury departments, Compliance and risk management teams
Are Cash Management Bills treated differently from other Treasury Bills for SLR?
No, they are treated as Government of India Treasury Bills under the same SLR rules, so they qualify as SLR securities just like other Treasury Bills.
Does this notification apply to Regional Rural Banks?
No, the notification explicitly excludes Regional Rural Banks from its scope.