Source: Reserve Bank of India · RBI/2011-12/57 · issued 01 Jul 2011 · ~2 min read
Quick answerRBI consolidated all existing guidelines on bank guarantees and co-acceptances into a single Master Circular effective July 1, 2011. It covers norms for unsecured advances, fraud prevention, guarantees for directors/stockbrokers, and payment of invoked guarantees. Applicable to all scheduled commercial banks except RRBs.
What changed
RBI replaced the July 1, 2010 Master Circular with an updated version incorporating instructions issued up to June 30, 2011. The circular consolidates all prior guidelines on guarantees and co-acceptances into one document, ensuring banks have a single reference point. No new policy changes were introduced; it is a compilation exercise.
What it means for you
Banks must now refer to this single Master Circular for all rules on guarantees and co-acceptances, replacing earlier fragmented circulars. The circular reinforces existing norms on unsecured advances, fraud prevention, and restrictions on guarantees for inter-company deposits and NBFC placements. Compliance with these consolidated instructions is mandatory under the Banking Regulation Act, 1949.
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
Review and update internal policies on guarantees and co-acceptances to align with the consolidated Master Circular.
Ensure all guarantee issuance procedures comply with the norms for unsecured advances and fraud prevention outlined in the circular.
Train staff on the updated guidelines, especially sections on guarantees for directors, stockbrokers, and export-related guarantees.
Monitor contingent liability exposures (guarantees, LCs) and apply appropriate risk weights as per off-balance sheet norms.
Verify that co-acceptance of bills and letter of credit practices adhere to the safeguards specified in the circular.
Who it affects
All Scheduled Commercial Banks (excluding RRBs), Bank guarantee and trade finance departments, Credit and risk management teams, Compliance and audit functions, Branches handling export guarantees and letters of credit
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).
Does this Master Circular introduce any new requirements for issuing guarantees?
No, it consolidates existing instructions issued up to June 30, 2011. Banks should continue following the same norms for unsecured advances, fraud prevention, and restrictions on guarantees for inter-company deposits and NBFC placements.
Are Regional Rural Banks (RRBs) covered under this circular?
No, the circular explicitly excludes RRBs. It applies only to all Scheduled Commercial Banks.
What are the key precautions banks must take when issuing guarantees?
Banks must follow norms for unsecured advances, implement fraud prevention measures as per Ghosh Committee recommendations, maintain internal control systems, and adhere to restrictions on guarantees for directors, stockbrokers, and inter-company deposits.
📜 This document’s life story (2 recorded events, each backed by RBI’s own words)
RBI’s words: “Please refer to the Master Circular DBOD.No.Dir.BC.8/13.03.00/2011-12 dated July 1, 2011 consolidating the instructions”
Repealed byRBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
RBI’s words: “Official withdrawal register entry #1471: DBOD.No.Dir.BC.8/13.03.00/2011-12 — "Master Circular - Guarantees and Co-acceptances" dated July 1, 2011”
📜 Read the original circular — full text as issued by RBI
RBI/2011-12/57
DBOD. No. Dir. BC. 8 /13.03.00/2011-12
July 1, 2011
10 Ashadha 1933 (Saka)
All Scheduled Commercial Banks
(excluding RRBs)
Dear Sir / Madam
Master Circular - Guarantees and Co-acceptances
Please refer to the Master Circular DBOD.No.Dir.BC.12/13.03.00/2010-11 dated July 1, 2010 updating instructions/ guidelines issued to banks till June 30, 2010 on matters relating to issue of Guarantees and Co-acceptances by banks. The Master Circular has been suitably updated by incorporating instructions issued on the subject up to June 30, 2011 and has also been placed on the RBI website ( http://www.rbi.org.in ). A copy of the Master Circular is enclosed.
Yours faithfully
( P.R. Ravi Mohan)
Chief General Manager
Encl: as above
Master Circular - Guarantees and Co-acceptances
CONTENTS
Para No
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2011-12/57 · issued 01 Jul 2011. The plain-English explanation above is BankPulse’s own independent summary.
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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=6536&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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