What changed
The transition period for banks to fully comply with the December 2007 circular on capital market exposure, specifically loans to mutual funds and IPCs, was extended by one month. The new deadline is July 31, 2010, instead of June 30, 2010.
What it means for you
Banks get an extra month to align their practices with the 2007 norms on capital market exposure. This extension provides temporary relief but underscores RBI's expectation of full compliance by the new date. No new requirements were introduced.
What you must do
- Ensure all loans to mutual funds and IPC issuance comply with the December 2007 circular by July 31, 2010.
- Review current exposure to capital market through MFs and IPCs and adjust as needed.
- Update internal compliance timelines to reflect the extended deadline.
- Prepare for RBI scrutiny post-July 31, 2010, as no further extensions are indicated.
Who it affects
All Scheduled Commercial Banks (excluding RRBs), Treasury and credit departments handling capital market exposure, Compliance teams monitoring regulatory deadlines
What is the new deadline for compliance with the 2007 circular on capital market exposure?
The deadline has been extended by one month to July 31, 2010, from the earlier June 30, 2010.
Does this circular introduce any new rules?
No, it only extends the transition period. The requirements remain as per the December 2007 circular.