What changed
The transition period for banks to meet requirements on capital market exposure, as per earlier circulars, was extended from July 31, 2010, to September 30, 2010. This extension applies to loans extended to mutual funds and the issuance of Irrevocable Payment Commitments (IPCs).
What it means for you
Banks get additional time to align their lending practices with RBI's capital market exposure guidelines, reducing immediate compliance pressure. This extension helps banks manage their exposure to mutual funds and IPCs without rushing adjustments, but they must finalize compliance by the new deadline.
What you must do
- Review your bank's current capital market exposure, including loans to mutual funds and IPCs, against RBI guidelines.
- Ensure full compliance with the requirements by September 30, 2010, using the extended transition period.
- Update internal policies and reporting systems to reflect the new deadline and avoid penalties.
Who it affects
All scheduled commercial banks (excluding RRBs), Bank treasury and risk management departments, Mutual funds and capital market borrowers
What is the new deadline for compliance?
The transition period has been extended to September 30, 2010, from the earlier deadline of July 31, 2010.
Which circulars are being referenced?
This extension relates to requirements from circular DBOD.Dir.BC.57/13.03.00/2007-08 dated December 14, 2007, and the previous extension in circular DBOD.Dir.BC.116/13.03.00/2009-10 dated June 30, 2010.
Does this apply to Regional Rural Banks?
No, the circular explicitly excludes RRBs and applies only to all scheduled commercial banks.