BREAKING NEWS

BREAKING NEWS ""**Expected DA for Bank Employees from Aug 2024 MINIMUM 7 SLAB AND MAXIMUM 24 SLAB*****I *****

VISITOR FROM WORLD

Free counters!

YOU ARE VISITOR

Blog Archive

LIVE

BREAKING NEWS ""**If we want PSU bank to compete with Pvt bank ---Give them a break Saturday first****Outcome of Today’s meeting with IBA - 31.01.2023*********

Friday, July 15, 2016

Banks Can't Use Their Own Fixed Deposit Receipts As Collateral

Strengthening its risk management mechanism, markets regulator Sebi on Friday barred banks from using their own Fixed Deposit Receipts (FDRs) as collateral in their function as trading or clearing members of stock exchanges, directly or through associate entities.

In a circular to clearing corporations, Sebi asked them not to accept such FDRs while trading or clearing members having already deposited their own FDRs or that of associate banks would need to replace them with other eligible collaterals within six months.

Sebi said it has observed that some banks who are also trading members or clearing members on the stock exchange/ clearing corporation have placed Fixed Deposit Receipts issued by themselves as collateral, with the clearing corporation.

However, Sebi's Risk Management Review Committee, after taking into account the global benchmarks set for collaterals by the international securities regulator body IOSCO, suggested that there is a need to align the risk management practices in Indian markets with the global principles.

Accordingly, Sebi has directed that "clearing corporation shall not accept FDRs from trading/clearing members as collateral, which are issued by the trading/ clearing member themselves or banks who are associate of trading/ clearing member".

Besides, within a period of six months, "members who have deposited their own FDRs or FDRs of associate banks shall replace such collateral, with other eligible collateral as per extant norms", the regulator said.

No comments:

Bank Unions Oppose PLI Scheme for Senior Bank Executives

AIBOC and AIBEA have written a letter to the DFS Secretary requesting him to review the recently introduced PLI Scheme for Senior Bank Execu...

script async src="https://pagead2.googlesyndication.com/pagead/js/adsbygoogle.js">