No longer current — withdrawn, no replacement on file yet
RBI's own words: “circulars IDMD.DOD.No.5893/10.25.66/2007-08 dated May 27, 2008 and IDMD.DOD.No.13/10.25.66/2011-12 dated November 18, 2011 issued by the Reserve Bank shall stand withdrawn.” — RBI/FMRD/2024-25/124
Source: Reserve Bank of India · RBI/2011-12/265 · issued 18 Nov 2011 · ~2 min read
Quick answerRBI now allows licensed Urban Co-operative Banks and systemically important NBFCs (non-deposit taking) to directly access NDS-OM for government securities trading, subject to financial criteria and a No-Objection Certificate from their regulatory department.
The rule, in the simplest words
Licensed Urban Co-operative Banks (UCBs) and big NBFCs (NBFC-ND-SIs) that don't take deposits can now directly trade government bonds on NDS-OM (a computer system for buying/selling bonds).
To join, a bank must get a No-Objection Certificate (a letter saying 'okay') from its RBI (Reserve Bank of India) regulator first.
UCBs need: a CRAR (safety cushion) of at least 9%, bad loans (net NPA) below 5%, and net worth (savings) of at least ₹25 crore.
NBFC-ND-SIs need: net owned funds (own money) of at least ₹100 crore, bad loans below 3% for the last 3 years, and profit for the last 3 years.
Both must have a current account with RBI or a settlement bank, an SGL account (bond storage), NDS membership, INFINET (secure network), and CCIL membership (clearing house).
How it plays out — a real example
A treasury officer in Indore, Priya, works for a licensed UCB that meets all the financial rules. She gets a No-Objection Certificate from her RBI regulator, then her bank joins NDS-OM directly. Now, instead of calling a broker to buy government bonds, Priya logs into the system and trades instantly, saving time and fees for her bank.
What changed
RBI extended direct NDS-OM membership to licensed UCBs and NBFC-ND-SIs under Section 45-I(c)(ii) of the RBI Act. Eligible entities must meet specific financial criteria and obtain a No-Objection Certificate from their respective regulatory department before applying.
What it means for you
This widens the secondary market for government securities by allowing more participants to trade directly. Banks and lenders in these categories can now bypass intermediaries, potentially reducing costs and improving liquidity management. However, compliance with CRAR, net worth, and NPA thresholds is mandatory.
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
Check if your institution meets the financial criteria: for UCBs, CRAR ≥9%, net NPA <5%, net worth ≥₹25 crore; for NBFC-ND-SIs, net owned funds ≥₹100 crore, net NPA <3% for 3 years, and net profit for 3 years.
Obtain a No-Objection Certificate from your respective RBI regulatory department before applying for NDS-OM membership.
Ensure you have a current account with RBI or a funds account with a Designated Settlement Bank, an SGL account, NDS membership, INFINET connectivity, and CCIL membership.
Submit the application with all required documents to the RBI as per the circular's annex.
Who it affects
Licensed Urban Co-operative Banks (UCBs), Systemically Important Non-Deposit taking NBFCs (NBFC-ND-SIs) under Section 45-I(c)(ii)
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
What is NDS-OM and why is this extension important?
NDS-OM is RBI's electronic trading platform for government securities. This extension allows UCBs and NBFC-ND-SIs to trade directly, broadening market participation and improving secondary market liquidity.
What are the key financial criteria for UCBs to get direct access?
UCBs need a minimum CRAR of 9%, net NPAs below 5%, and net worth of at least ₹25 crore, along with infrastructure like SGL account, NDS membership, and CCIL membership.
Do NBFC-ND-SIs need a No-Objection Certificate?
Yes, all eligible entities must obtain a No-Objection Certificate from their respective RBI regulatory department before applying for NDS-OM membership.
📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
RBI’s words: “circulars IDMD.DOD.No.5893/10.25.66/2007-08 dated May 27, 2008 and IDMD.DOD.No.13/10.25.66/2011-12 dated November 18, 2011 issued by the Reserve Bank shall stand withdrawn.”
📜 Read the original circular — full text as issued by RBI
RBI/2011-12/265
IDMD.DOD.No.13 /10.25.66/2011-12
November 18, 2011
To All SGL/CSGL Account holders,
Dear Sir/Madam,
Direct Access to Negotiated Dealing System-Order Matching (NDS-OM)
Please refer to our circular IDMD.DOD.No. 5893 /10.25.66/ 2007-08 dated May 27, 2008 on access to NDS-OM.
2. With a view to widening the secondary market in Government Securities to more number of participants, it has been decided to extend direct access to NDS-OM to licensed Urban Co-operative Banks (UCBs) and Systemically Important Non-Deposit taking Non-Banking Financial Companies (NBFC-ND-SIs) falling under the purview of Section 45-I (c) (ii) of the Reserve Bank of India (RBI) Act, 1934 (i.e. NBFC-ND-SIs which carry on as their business or part of their business the activity of acquisition of shares, stock, bonds, debentures or securities issued by a Government or local authority or other marketable securities of a like nature). The financial criteria and other requirements for direct access to NDS-OM for the above entities are furnished in the Annex .
3. It may, however, be noted that extension of direct membership of NDS-OM to licensed UCBs and NBFC-ND-SIs [under Section 45-I (c) (ii) of the RBI Act, 1934] is subject to the comfort of the respective regulatory department of the Reserve Bank of India. Hence, all licensed UCBs and NBFC-ND-SIs which are eligible to obtain direct access to NDS-OM as per the criteria laid down in the Annex are advised to furnish a No-Objection Certificate from their respective regulatory departments while applying for NDS-OM membership.
Yours faithfully,
(Sanjay Hansda)
Director & Officer-in-Charge
Annex
Criteria for direct access to NDS-OM
1. Licensed UCBs :
Current account with RBI or a funds account with one of the Designated Settlement Banks (DSBs) chosen by Clearing Corporation of India Limited (CCIL) for funds settlement. Subsidiary General Ledger (SGL) Account with RBI. Membership of Negotiated Dealing System (NDS). Indian Financial Network (INFINET) connectivity. Membership of CCIL. Minimum Capital to Risk Weighted Assets Ratio (CRAR) of 9%. Net Non-Performing Assets (NPA) of less than 5%. Minimum net worth of Rs. 25 crore. 2. NBFC-ND-SIs [under Section 45-I-(c) (ii) of the RBI Act, 1934] :
Current account with RBI or a funds account with one of the Designated Settlement Banks (DSBs) chosen by Clearing Corporation of India Limited (CCIL) for funds settlement. Subsidiary General Ledger (SGL) Account with RBI. Membership of Negotiated Dealing System (NDS). Indian Financial Network (INFINET) connectivity. Membership of CCIL. Minimum Net Owned Funds of Rs. 100 crore. Net NPAs of less than 3% for the past 3 years. Net Profit for the past 3 years.
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2011-12/265 · issued 18 Nov 2011. 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=6823&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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