What changed
RBI has updated the Master Direction – Reserve Bank of India (Repurchase Transactions (Repo)) Directions, 2025 to include Municipal Debt Securities as eligible securities for repo transactions.
What it means for you
This update allows banks and other financial institutions to use municipal debt securities as collateral for repo transactions, which can help increase liquidity in the market and provide more options for investors.
What you must do
- Review and update internal processes to reflect the inclusion of municipal debt securities as eligible securities for repo transactions
- Ensure compliance with the updated Master Direction – Reserve Bank of India (Repurchase Transactions (Repo)) Directions, 2025
Who it affects
Banks and other financial institutions participating in repo market, Investors and market participants
What is the effective date of the updated Master Direction?
The updated Master Direction is effective immediately.
What types of securities are now eligible for repo transactions?
Municipal Debt Securities, in addition to existing eligible securities, are now included.