What changed
RBI issued a new master circular consolidating all previous instructions on resource raising for all-India term lending and refinancing institutions, replacing the July 2012 version. The circular updates guidelines up to June 30, 2013, covering term deposits, term money borrowings, CDs, CPs, ICDs, and bond/debenture norms. It also references a standing committee to expedite bond issuance approvals.
What it means for you
Banks and FIs now have a single reference document for compliance, reducing confusion from multiple circulars. The consolidated norms aim to create a level playing field among statutory and non-statutory FIs, impacting how they raise short-term and long-term funds. Lenders dealing with these FIs should expect more standardized documentation and reporting requirements.
What you must do
- Review the master circular to ensure your FI's resource raising practices align with the consolidated norms.
- Update internal compliance checklists to reference the new circular (DBOD.No.FID.FIC.1/01.02.00/2013-14) instead of older ones.
- Train treasury and compliance teams on the umbrella limit framework for term deposits, CDs, CPs, and ICDs.
- Monitor bond issuance procedures, especially if your FI needs to approach the standing committee for approvals.
Who it affects
Exim Bank, NABARD, NHB, SIDBI, All-India term lending and refinancing institutions, Banks and lenders dealing with these FIs
What is the 'umbrella limit' mentioned in the circular?
The umbrella limit is a consolidated ceiling for resource raising instruments like term deposits, term money borrowings, CDs, CPs, and ICDs, designed to give FIs flexibility while ensuring regulatory control.
Does this circular affect bond issuance by FIs?
Yes, it includes norms for bond/debenture issuance and mentions a standing committee to expedite approvals, ensuring a level playing field between statutory and non-statutory FIs.
Which institutions are covered under this master circular?
The circular applies to Exim Bank, NABARD, NHB, and SIDBI, which are all-India term lending and refinancing institutions.