What changed
RBI issued a clarification to ensure uniform reporting of reverse repo transactions in Form A Return. For reverse repos with banks, original tenors up to 14 days must be reported under Item III(b) and Memo 2.1; tenors over 14 days under Item III(c) and Memos 2.1 and 2.2. Reverse repos with non-banks, regardless of tenor, go under Item VI(a).
What it means for you
Banks must now consistently classify reverse repo transactions in their statutory returns, reducing ambiguity and ensuring comparability across institutions. This impacts how inter-bank assets and bank credit are reported, which could affect liquidity and CRR/SLR calculations. Lenders need to update their reporting systems to align with these categories.
What you must do
- Review your current Form A reporting for reverse repo transactions and reclassify as per the new guidelines.
- Update internal reporting templates and systems to separate reverse repos by counterparty (bank vs non-bank) and tenor (≤14 days vs >14 days).
- Train treasury and compliance teams on the revised classification to ensure accurate submissions.
- Audit past returns for consistency and prepare for potential RBI scrutiny on reporting uniformity.
Who it affects
Commercial banks reporting Form A Return, Treasury departments handling reverse repo transactions, Compliance and regulatory reporting teams
What is the key change in reporting reverse repos with banks?
Reverse repos with banks must now be split by original tenor: up to 14 days under 'Money at call and short notice' (Item III(b)), and over 14 days under 'Advances to banks' (Item III(c)).
How should reverse repos with non-banks be reported?
All reverse repos with non-banks, regardless of tenor, should be reported under Item VI(a) as part of 'Bank Credit' (Loans, cash credits, and overdrafts).
Does this circular affect CRR or SLR calculations?
The circular focuses on reporting classification in Form A, which is used for CRR/SLR compliance. Correct classification ensures accurate asset reporting, which indirectly impacts these calculations.