What changed
The December 22, 2023 circular revises instructions from the October 16, 2023 circular on reporting reverse repo transactions with non-banks. For original tenors up to and including 14 days, reporting in Form A is no longer required. For tenors exceeding 14 days, these transactions must now be reported under Item VI(a) of Form A, which covers loans, cash credits, and overdrafts under Bank Credit in India (excluding inter-bank advances).
What it means for you
Banks must update their Form A reporting processes to exclude short-term reverse repo with non-banks (≤14 days) and reclassify longer-term ones (>14 days) as bank credit items. This reduces reporting burden for short-term transactions but requires careful tracking of tenors to ensure accurate classification. Lenders should review their reverse repo portfolios and adjust internal reporting systems accordingly.
What you must do
- Update Form A reporting templates to exclude reverse repo with non-banks for tenors up to 14 days.
- Reclassify reverse repo with non-banks for tenors over 14 days under Item VI(a) of Form A.
- Train reporting staff on the new tenor-based classification to avoid misreporting.
- Audit current reverse repo transactions to ensure compliance with the revised instructions.
Who it affects
Commercial banks engaging in reverse repo with non-bank institutions, Bank reporting and compliance teams handling Form A submissions, Treasury departments managing short-term liquidity operations
What is the key change in reporting reverse repo with non-banks?
Transactions with original tenors up to 14 days are exempt from Form A reporting, while those over 14 days must be reported under Item VI(a) as loans/cash credits/overdrafts.
Does this circular affect reverse repo with other banks?
No, the circular specifically addresses reverse repo transactions with non-banks (other institutions). Inter-bank reverse repo reporting remains unchanged.
When does this revision take effect?
The circular is dated December 22, 2023, and applies immediately. All other instructions from the October 16, 2023 circular remain unchanged.