RBI allows NDS-OM matching for PM-GAH and inter-GAH G-sec trades
Current · Source: Reserve Bank of India · RBI/2024-25/115 · issued 17 Feb 2025 · ~2 min read
Quick answerRBI now permits Primary Members to match G-sec trades with their own Gilt Account Holders or between two GAHs on NDS-OM, with CCIL clearing and settlement. Bilaterally negotiated trades can also opt for CCIL settlement. SGL bouncing rules apply on settlement failures.
The rule, in the simplest words
Primary Members (big banks that trade government bonds) can now match trades with their own Gilt Account Holders (customers who hold bonds) or between two such customers on the NDS-OM (a computer system for bond trading).
All trades matched on NDS-OM must go through CCIL (a central company that makes sure trades are completed safely).
If two parties agree on a trade outside the system, they can choose to have CCIL handle the settlement (the final exchange of money and bonds).
If a trade fails to settle, it counts as 'SGL bouncing' (like a bounced check for bonds) and the bank will face penalties as per RBI rules from July 14, 2010.
How it plays out — a real example
A treasury officer in Indore, Priya, works for a Primary Member bank. She has a customer who wants to sell government bonds to another customer of the same bank. Before this rule, Priya couldn't use the NDS-OM system for this trade, so it was riskier. Now, she can match the trade on NDS-OM, and CCIL will ensure both sides get what they're owed, making her job safer and easier.
What changed
Previously, transactions between a Primary Member and its own Gilt Account Holder or between two GAHs of the same PM were not allowed on NDS-OM and were not cleared through CCIL. Now, RBI has permitted matching of such trades on both the anonymous Order Matching and RFQ segments of NDS-OM, with mandatory CCIL clearing and settlement. Additionally, bilaterally negotiated trades between these parties can optionally use CCIL settlement.
What it means for you
This change brings previously excluded G-sec transactions into the central clearing framework, reducing counterparty risk for banks and other participants. It also enhances transparency and operational efficiency by allowing these trades to be matched on NDS-OM. Banks acting as Primary Members must ensure compliance with SGL bouncing penalties for any settlement failures.
What you must do
Update internal systems to enable NDS-OM matching for PM-GAH and inter-GAH trades on both Order Matching and RFQ segments.
Ensure all such matched trades are routed through CCIL for clearing and settlement.
Review bilaterally negotiated trades with own GAHs or between GAHs and consider opting for CCIL settlement to reduce risk.
Reinforce settlement discipline to avoid SGL bouncing penalties as per RBI circular of July 14, 2010.
Monitor CCIL operational guidelines expected to be issued for detailed procedures.
Who it affects
Primary Members of NDS-OM, Gilt Account Holders, Clearing Corporation of India Limited, All participants in the Government securities market
❓ Common questions
What types of transactions are now permitted on NDS-OM under this circular?
Transactions between a Primary Member and its own Gilt Account Holder, and between two GAHs of the same PM, are now allowed on both the anonymous Order Matching and RFQ segments of NDS-OM.
Will bilaterally negotiated trades between a PM and its GAH also get CCIL settlement?
Yes, such trades that are bilaterally negotiated and reported to NDS-OM can optionally avail clearing and settlement through CCIL.
What happens if a settlement fails for these transactions?
Any settlement failure will be treated as an instance of 'SGL bouncing' and will attract penalties as per the RBI circular dated July 14, 2010, as amended.
📜 Read the original circular — full text as issued by RBI
RBI/2024-25/115
FMRD.MIOD.No.15/11.01.051/2024-25
February 17, 2025
To
All participants in Government Securities market
Madam/Sir,
Government securities transactions between a Primary Member (PM) of NDS-OM and its own Gilt Account Holder (GAH) or between two GAHs of the same PM
Transactions in Government securities in the Over the Counter (OTC) market are currently undertaken either on Negotiated Dealing System - Order Matching (NDS-OM) platform or are bilaterally negotiated outside the system and subsequently reported on NDS-OM. All transactions matched on NDS-OM platform are cleared and settled through the Clearing Corporation of India Limited (CCIL), which acts as a Central Counter Party (CCP) for transactions in Government securities.
2. At present, transactions between a Primary Member (PM) and its own Gilt Account Holder (GAH) and between two GAHs of the same PM are not permitted to be matched on NDS-OM and are also not cleared and settled through CCIL. On a review and based on the feedback received, it has been decided to:
Permit matching of transactions between a PM and its own GAH or between two GAHs of the same PM on both the anonymous Order Matching segment and the Request for Quote (RFQ) segment of NDS-OM. Transactions matched on NDS-OM shall be cleared and settled through CCIL.
Extend the facility of clearing and settlement through CCIL to transactions between a PM and its own GAH or between two GAHs of the same PM which are bilaterally negotiated and reported to NDS-OM, on an optional basis.
3. Any failure in the settlement of these transactions shall be treated as an instance of ‘SGL bouncing’ in terms of RBI circular “Government securities Act, 2006, Section 27 and 30 – Imposition of penalty for bouncing of SGL forms” dated July 14, 2010 , as amended from time to time, and will be subjected to the applicable penal provisions, as specified therein.
4. Detailed operational guidelines in this regard will be issued by CCIL.
5. The Directions contained in this circular have been issued under Section 45W of Chapter IIID of the Reserve Bank of India Act, 1934 and are without prejudice to permissions/ approvals, if any, required under any other law.
Yours faithfully,
(Dimple Bhandia)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2024-25/115 · issued 17 Feb 2025. The plain-English explanation above is BankPulse’s own independent summary.
Ensure all such matched trades are routed through CCIL for clearing and settlement.
Review bilaterally negotiated trades with own GAHs or between GAHs and consider opting for CCIL settlement to reduce risk.
Reinforce settlement discipline to avoid SGL bouncing penalties as per RBI circular of July 14, 2010.
💻 IT / Systems
Update internal systems to enable NDS-OM matching for PM-GAH and inter-GAH trades on both Order Matching and RFQ segments.
📜 Compliance
Monitor CCIL operational guidelines expected to be issued for detailed procedures.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are an IT/Systems lead at a bank this circular applies to (Primary Members of NDS-OM, Gilt Account Holders, Clearing Corporation of India Limited, All participants in the Government securities market), your first concrete step on “RBI allows NDS-OM matching for PM-GAH and inter-GAH G-sec trades” is: “Update internal systems to enable NDS-OM matching for PM-GAH and inter-GAH trades on both Order Matching and RFQ segments.” (RBI issued this 17 Feb 2025).
Circular: RBI/2024-25/115 -- RBI allows NDS-OM matching for PM-GAH and inter-GAH G-sec trades
Issued: 17 Feb 2025
Action required: Update internal systems to enable NDS-OM matching for PM-GAH and inter-GAH trades on both Order Matching and RFQ segments.
Action required: Ensure all such matched trades are routed through CCIL for clearing and settlement.
Action required: Review bilaterally negotiated trades with own GAHs or between GAHs and consider opting for CCIL settlement to reduce risk.
Action required: Reinforce settlement discipline to avoid SGL bouncing penalties as per RBI circular of July 14, 2010.
Action required: Monitor CCIL operational guidelines expected to be issued for detailed procedures.
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=12782&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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