No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2010-11/249 · issued 28 Oct 2010 · ~1 min read
Quick answerRBI extends deadline for custodian banks to include inalienable right clause in client agreements for IPCs to December 31, 2010. Pre-funded transactions are exempt from this clause requirement.
What changed
Custodian banks now have until December 31, 2010, to incorporate a clause in client agreements granting them an inalienable right over securities to be received as payout, extended from the earlier requirement to comply before November 1, 2010. Additionally, transactions that are pre-funded—where clear INR funds are in the customer's account or, for FX deals, the bank's nostro account is credited before IPC issuance—are exempt from this clause requirement.
What it means for you
Banks issuing IPCs to stock exchanges for mutual funds and FIIs get more time to comply with risk mitigation measures, easing operational pressure. The exemption for pre-funded deals reduces compliance burden for transactions where funds are already secured, allowing smoother settlement processes.
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
Update client agreements to include the inalienable right clause by December 31, 2010, for non-pre-funded transactions.
Identify and segregate pre-funded transactions to apply the exemption from the clause requirement.
Ensure internal systems can verify pre-funding status before issuing IPCs.
Communicate the revised timeline and exemption criteria to relevant teams and clients.
repealed_by — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
Status change: withdrawn03 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 including the inalienable right clause in client agreements?
The deadline has been extended to December 31, 2010, from the original November 1, 2010.
Are there any transactions exempt from this clause requirement?
Yes, pre-funded transactions—where clear INR funds are in the customer's account or, for FX deals, the bank's nostro account is credited before IPC issuance—are exempt.
📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Repealed byRBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
RBI’s words: “Official withdrawal register entry #1597: DBOD.Dir.BC.52/13.03.00/2010-11 — "Banks' Exposure to Capital Market - Issue of Irrevocable Payment Commitments (IPCs)" dated October 28, 2010”
📜 Read the original circular — full text as issued by RBI
RBI/2010-11/249
DBOD.Dir.BC.52 /13.03.00/2010-11
October 28, 2010
All Scheduled Commercial Banks
(excluding RRBs)
Dear Sir / Madam
Banks' Exposure to Capital Market -
Issue of Irrevocable Payment Commitments (IPCs)
Please refer to our circular No. DBOD.Dir.BC.46/13.03.00/2010-11 dated September 30, 2010 in terms of which certain risk mitigation measures were prescribed in the context of banks issuing IPCs to various Stock Exchanges on behalf of Mutual Funds and FIIs, as a transitionary arrangement upto October 31, 2011.
2. Custodian banks have expressed operational difficulties in complying with the requirement of incorporating a clause in the agreement with their clients which gives them an inalienable right over the securities to be received as payout in any settlement before November 1, 2010. Accordingly, it has been decided to grant an additional period of two months i.e. upto December 31, 2010, to the custodian banks to fulfil this requirement.
3. It is also clarified that in cases where transactions are pre-funded i.e. there are clear INR funds in the customer’s account and, in case of FX deals, the bank’s nostro account has been credited before the issuance of the IPC by custodian banks, the requirement of the clause of inalienable right over the security to be received as payout in the agreement with the clients will not be insisted upon.
Yours faithfully,
(P. R. Ravi Mohan)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2010-11/249 · issued 28 Oct 2010. The plain-English explanation above is BankPulse’s own independent summary.
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
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=6061&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.
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