The RBI directive said dealing in government securitiesrouted through recognised stock exchanges should follow the exchanges' settlement rules.

Government debt instruments are currently traded only onthe National Stock Exchange (NSE) and the Over The Counter Exchange of India (OTC).

That meant deals done on the the National Stock Exchangecould be for maturities up to five days forward, dealers said.

Whereas for deals done on the OTC the settlement has to beonly on "spot" delivery basis as per the Securities Contract Act, 1956, the RBI statement said.

Dealers said the necessity of routing deals through abrokerage if a forward settlement was needed would not pose a problem nor will liquidity be impacted.

Bankers said several players in the market had yet toreceive the RBI clarification, but deals for settlements three and four days forward were being struck.

Forward maturity transactions in the fixed income markethad stopped after the RBI in September reminded banks that forward deals they were undertaking in securities were disallowed in the Indian market under rules set in 1991 and 1992.

The latest RBI directive states the date of lodgement ofthe Statutory General Ledger form with the central bank should be within one working day of signing of the transfer form.