Current · Source: Reserve Bank of India · RBI/2011-12/427 · issued 05 Mar 2012 · ~1 min read
Quick answerFrom April 1, 2012, all OTC trades in Certificates of Deposit and Commercial Papers must be cleared and settled through NSCCL or ICCL under DvP I, replacing bilateral settlement. This aligns with corporate bond settlement norms.
The rule, in the simplest words
From April 1, 2012, all trades done outside a stock exchange (OTC) in Certificates of Deposit (CDs) and Commercial Papers (CPs) must be settled through a central clearing house (NSCCL or ICCL), not directly between two banks.
The settlement must follow DvP I (Delivery versus Payment, type I) which means the money and the security are exchanged at the same time, reducing risk.
This rule replaces the old way where trades were reported on the FIMMDA platform but settled directly between the two parties (bilateral settlement).
Banks and other RBI-regulated entities must update their systems and train their teams to use the new clearing process through NSCCL or ICCL.
How it plays out — a real example
A branch operations officer in Indore, Priya, handles her bank's treasury operations. On April 2, 2012, she executes an OTC trade in Commercial Papers with another bank. Instead of settling directly with them, she ensures the trade is cleared through NSCCL's pooling account, following the new DvP I rule. This makes her feel more secure because the central clearing house guarantees the settlement, reducing the risk of the other bank not paying.
What changed
Previously, OTC trades in CDs and CPs were reported on the FIMMDA platform within 15 minutes but settled bilaterally. Now, RBI mandates DvP I-based settlement through NSCCL or ICCL pooling accounts, effective April 1, 2012.
What it means for you
Banks and lenders must shift from bilateral settlement to centralized clearing for CDs and CPs, reducing counterparty risk. This standardizes settlement with corporate bond practices, enhancing market transparency and operational efficiency.
What you must do
Ensure all OTC trades in CDs and CPs from April 1, 2012 are cleared through NSCCL or ICCL.
Update internal systems and processes to comply with DvP I settlement norms.
Coordinate with NSCCL or ICCL for pooling account access and settlement procedures.
Train trading and settlement teams on the new mandatory clearing requirements.
Who it affects
All RBI-regulated entities trading in CDs and CPs, Treasury and settlement departments of banks, Primary dealers and other market participants
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
What is DvP I settlement?
Delivery versus Payment I ensures simultaneous transfer of securities and funds, reducing settlement risk. Here, it applies to OTC trades in CDs and CPs through NSCCL or ICCL.
When does this mandate take effect?
The requirement is effective from April 1, 2012, as per the RBI circular dated March 5, 2012.
Does this replace the FIMMDA reporting requirement?
No, the existing 15-minute reporting on FIMMDA platform continues. The new rule adds mandatory clearing and settlement through NSCCL or ICCL.
📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
RBI’s words: “Please refer to our Notification IDMD.PCD.No.20/14.01.02/2011-12 dated March 05, 2012 on the captioned subject.”
📜 Read the original circular — full text as issued by RBI
RBI/2011-12/427
IDMD.PCD. 20 /14.01.02/2011-12
March 5, 2012
To
All RBI-regulated Entities
Dear Sir/Madam
Settlement of OTC transactions in Certificates of Deposit (CDs) and Commercial Papers (CPs)
In terms of circular IDMD.DOD.11/11.08.36/2009-10 dated June 30, 2010 , all RBI-regulated entities are mandated to report their OTC transactions in CDs and CPs on the FIMMDA reporting platform within 15 minutes of the trade for online dissemination of market information. Such trades, however, are being settled between the counterparties on a bilateral basis.
2. It has now been decided to introduce DvP I based settlement for all OTC trades in CDs and CPs on the lines already existing in case of settlement of OTC trades in corporate bonds, i.e., settlement through the pooling accounts of the National Securities Clearing Corporation Limited (NSCCL) and Indian Clearing Corporation Limited (ICCL).
3. Accordingly, with effect from April 1, 2012, all OTC trades in CDs and CPs shall necessarily be cleared and settled through the NSCCL or ICCL under the above arrangement, as per the norms specified by them from time to time.
Yours faithfully,
(K K Vohra)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2011-12/427 · issued 05 Mar 2012. The plain-English explanation above is BankPulse’s own independent summary.
Update internal systems and processes to comply with DvP I settlement norms.
Coordinate with NSCCL or ICCL for pooling account access and settlement procedures.
Train trading and settlement teams on the new mandatory clearing requirements.
📜 Compliance
Ensure all OTC trades in CDs and CPs from April 1, 2012 are cleared through NSCCL or ICCL.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are a Compliance officer at a bank this circular applies to (All RBI-regulated entities trading in CDs and CPs, Treasury and settlement departments of banks, Primary dealers and other market participants), your first concrete step on “DvP I Settlement Mandated for OTC CDs and CPs” is: “Ensure all OTC trades in CDs and CPs from April 1, 2012 are cleared through NSCCL or ICCL.” (RBI issued this 05 Mar 2012).
Circular: RBI/2011-12/427 -- DvP I Settlement Mandated for OTC CDs and CPs
Issued: 05 Mar 2012
Action required: Ensure all OTC trades in CDs and CPs from April 1, 2012 are cleared through NSCCL or ICCL.
Action required: Update internal systems and processes to comply with DvP I settlement norms.
Action required: Coordinate with NSCCL or ICCL for pooling account access and settlement procedures.
Action required: Train trading and settlement teams on the new mandatory clearing requirements.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
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=7040&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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