The Reserve Bank of India (RBI) on Monday has decided to allow unlisted companies who have been issued special securities by the government and have gilt accounts with scheduled commercial banks to enter into ready forward contracts. The RBI said that these entities will be allowed to trade in the market repo and not repos with the RBI under the liquidity adjustment facility.
?The eligible unlisted companies can enter into ready forward transactions as the borrower of funds in the first leg of the repo contract only against the collateral of the special securities issued to them by the government ,? it added.
The counterparty to the eligible unlisted companies for repo transactions should be either a bank or a primary dealer maintaining a subsidiary general ledger (SGL) account with the central bank.
The entities which do not maintain SGL account with the RBI but have gilt account with a bank or any other entity include any bank, any primary dealer authorised by the RBI, any non-banking financial company registered with the RBI, any mutual fund registered with the Securities and Exchange Board of India, any housing finance company registered with the National Housing Bank, any insurance company registered with the Insurance Regulatory and Development Authority, any non-scheduled Urban Co-operative bank, any listed company, having a gilt account with a scheduled commercial bank and any unlisted company which has been issued special securities by the government of India and having gilt account with a bank.